The requirements for depositing FICA taxes and income taxes withheld from
nonagricultural employees’ wages vary according to the amount of such taxes reported
during a “lookback period.”
a. True
b. False
If the employer has made timely deposits that pay the FUTA tax liability in full, the
filing of Form 940 can be delayed until:
a. December 31.
b. February 15.
c. February 10.
d. February 1.
e. March 31.
A worker hired by the federal government in 2018 is covered under FICA.
a. True
b. False
For FUTA purposes, an employer must pay a higher FUTA tax rate on executives than
on nonsupervisory personnel.
a. True
b. False
Instruction 21
Unless instructed otherwise, compute hourly rate and overtime rates as follows:
1)Carry the hourly rate and the overtime rate to 3 decimal places and then round off to 2
decimal places (round the hourly rate to 2 decimal places before multiplying by one and
onehalf to determine the overtime rate).
2)If the third decimal place is 5 or more, round to the next higher cent.
3)If the third decimal place is less than 5, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that
follow.
Refer to Instruction 21 Abel works a 37 1/2 hour week at $10.75 an hour. Overtime
hours are paid at 1 1/2 times the regular rate.
(a) Abel’s regular weekly earnings are ____________.
(b) Abel’s overtime rate is _____________.
(c) If Abel works 6 hours overtime during one week, calculate Abel’s total gross
earnings ____________.
Employers do not pay payroll taxes on payments made to independent contractors.
a. True
b. False
Under the Family and Medical Leave Act, employers can exempt an employee who has
not worked for the employer for at least one year and has worked for the company for at
least 1,250 hours in the last year.
a. True
b. False
Which of the following provides for a reduction in the employer’s state unemployment
tax rate based on the employer’s experience with the risk of unemployment?
a. Voluntary contribution
b. Title XII advances
c. Pooledfund laws
d. Experiencerating plan
e. None of the above
Institutions of higher education are extended coverage under FLSA without regard to
their annual sales volume.
a. True
b. False
Under the continental system of recording time, 9:20 p.m. is recorded as:
a. P2120.
b. 9:20P.
c. 2120.
d. 2220.
e. none of the above.
By the use of executive orders, the federal government has banned discrimination in
employment on government contracts.
a. True
b. False
Under the Uniform Unclaimed Property Act, any unclaimed paychecks must be turned
over to the state after the next payday.
a. True
b. False
Bona fide meal periods when the employee is completely relieved from duty are not
considered working time.
a. True
b. False
Instruction 51
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.
Refer to Instruction 51. Queno Company had FUTA taxable wages of $510,900 during
the year. Determine its:
a)gross FUTA tax __________.
b)FUTA tax credits (assuming no penalties) __________.
c)net FUTA tax __________.
If the third decimal place is less than 5, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that
follow.
Refer to Instruction 31. Eager, a tipped employee, reported to his employer that he had
received $320 in tips during March. On the next payday, April 6, he was paid his
regular salary of $400.
a)The amount of OASDI taxes to withhold from Eager’s pay is __________.
b)The amount of HI taxes to withhold from Eager’s pay is __________.
Which of the following items would require an adjusting entry at the end of each
accounting period?
a. Garnishment for child support payments
b. Withholdings for a 401(k) plan
c. Vacation pay earned by employees
d. Union dues withheld
e. None of the above
Nonagricultural employers who withhold income taxes and are liable for social security
taxes must file a monthly tax and information return.
a. True
b. False
Form 944 (annual form) can be used by all new employers instead of Form 941.
a. True
b. False
Severance pay is considered taxable wages under FICA.
a. True
b. False
“Engaged to wait” and “waiting to be engaged” are both considered work time.
a. True
b. False
Which of the following acts levies a tax on employers and employees that is credited to
the Federal OldAge and Survivors’ Trust Fund and the Federal Disability Insurance
Trust Fund?
a. Federal Income Tax Act
b. Federal Insurance Contributions Act
c. Fair Labor Standards Act
d. Federal Unemployment Tax Act
e. Employee Retirement Income Security Act
Each state imposes an income tax on employees that is 2 percent of gross wages.
a. True
b. False
HTMLENTITY#8203HTMLENTITYTitle VII of the Civil Rights Act is referred to as
the:
a. HTMLENTITY#8203HTMLENTITYWage and Hour Act
b. HTMLENTITY#8203HTMLENTITYSocial Security Act
c. HTMLENTITY#8203HTMLENTITYAge Discrimination Act
d. HTMLENTITY#8203HTMLENTITYEqual Employment Opportunity Act
e. HTMLENTITY#8203HTMLENTITYImmigration Reform Act
Schedule A of Form 940 only has to be completed by employers who are subject to the
Title XII credit reduction.
a. True
b. False
Under the federal income tax withholding law, a definition of employee excludes
partners.
a. True
b. False
Under the FLSA, overtime pay is required for:
a. any hours worked in excess of 8 in one day.
b. all work on Sunday.
c. all hours worked in excess of 40 in a workweek.
d. all hours worked on Christmas.
e. all of the above.
A monthly depositor is one who reported employment taxes of $50,000 or more for the
four quarters in the lookback period.
a. True
b. False
All employers can grant compensatory time off to employees in place of overtime pay.
a. True
b. False
Which of the following laws establishes the minimum wage?
a. Fair Labor Standards Act
b. Federal Income Tax Act
c. Federal Insurance Contributions Act
d. Federal Unemployment Tax Act
e. Fair Employment Laws
Instruction 51
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.
Refer to Instruction 51. Niemann Company has a SUTA tax rate of 7.1%. The taxable
payroll for the year for FUTA and SUTA is $82,600.
a)The amount of FUTA tax for the year is __________.
b)The amount of SUTA tax for the year is __________.
After completion of Form W4, an employer must copy the employee’s social security
card and place it in the employee’s employment file.
a. True
b. False
Carmen Gaetano worked 46 hours during this payweek. He is paid timeandahalf for
hours over 40 and his pay rate is $17.90/hour. What was his overtime premium pay for
this workweek?
a. $107.40
b. $161.10
c. $50.70
d. $53.70
e. $26.85
Which of the following acts deals with the unpaid leave for a family or medical
emergency?
a. Fair Labor Standards Act
b. Occupational Safety and Health Act
c. Family and Medical Leave Act of 1993
d. WalshHealey Public Contracts Act
e. None of the Above
Under the FLSA enterprise coverage test, hospitals and nursing homes are only covered
if their annual charges for services are at least $500,000.
a. True
b. False