Workers exempt from all of the FLSA requirements include:
a. employees paid by the hour.
b. clerktypists earning less than $200 a week.
c. taxicab drivers.
d. motion picture theater employees.
e. none of the above.
Arch gives you an amended Form W4 dated March 9, 2018 on which he claims two
additional withholding allowances. He asks you to refund the excess taxes that were
deducted from January 1 to March 9 when Arch claimed only one withholding
allowance. You should:
a. repay the overwithheld taxes on Arch’s next payday.
b. tell Arch that you will spread out a refund of the overwithheld taxes equally over the
next six pays.
c. inform Arch that you are unable to repay the overwithheld taxes that were withheld
before
March 9 and that the adjustment will have to be made when he files his annual income
tax return.
d. tell Arch to write the IRS immediately and ask for a refund of the overwithheld taxes.
e. inform Arch that you will appoint a committee to study his request.
Voluntary contributions to a state’s unemployment department are:
a. allowed in all states.
b. designed to increase an employer’s reserve account in order to lower the employer’s
contribution rate.
c. capable of being paid at any time with no time limit.
d. returned to the employer at the end of the following year.
e. sent directly to the IRS.
“Dumping” is legal in all but a few states.
a. True
b. False
Educational assistance payments made to workers to improve skills required of their
jobs are nontaxable for unemployment purposes.
a. True
b. False
Under the safe harbor rule, when employers deposit their tax liabilities, they may have a
shortfall of no more than $200 without incurring any penalty.
a. True
b. False
If a business does not meet the enterprise coverage test, none of its workers qualify for
individual employee coverage.
a. True
b. False
The tax paid to the federal government for unemployment taxes is used for paying state
and federal administrative expenses of the unemployment program.
a. True
b. False
Which of the following noncash fringe benefits does not represent taxable income
subject to federal income tax withholding?
a. Flight on employerprovided airline
b. Personal use of company car
c. Sick pay
d. Employerpaid membership to a country club
e. All of the above are taxable.
There are no states that allow employees to access their personnel files.
a. True
b. False
The employer is required by the FLSA to display a poster that informs employees of the
provisions of the law.
a. True
b. False
Employment application forms are usually discarded when the applicant is hired.
a. True
b. False
In recording the monthly adjusting entry for accrued wages at the end of the accounting
period, the amount of the adjustment would usually be determined by:
a. collecting the timesheets for the days accrued.
b. using the same amount as the prior month’s adjustment.
c. using the wages of the salaried workers only.
d. a percentage of the previous week’s gross payroll.
e. a percentage of the previous week’s net payroll.
By completing Form W4P, a person can elect to have no income tax withheld from the
annuity amounts the person receives.
a. True
b. False
A debit to the employees FIT payable account removes the liability for the amount of
federal income taxes withheld from employees’ wages.
a. True
b. False
All major cities have enacted ordinances establishing a socalled “living wage” at $10.25
per hour.
a. True
b. False
Of the two main methods of withholding, only the wagebracket method distinguishes
unmarried persons from married persons.
a. True
b. False
Every state allows employers to make epayment options as a condition of employment.
a. True
b. False
Employees paid by the hour without a guarantee of a weekly minimum salary do not
qualify for the salary test for whitecollar workers.
a. True
b. False
Which of the following is not part of the social security program?
a. Federal Income Tax Law
b. Federal OldAge and Survivors’ Trust Fund
c. Medicare
d. SelfEmployment Contributions Act
e. All are part of the social security program
The FUTA tax part of the payroll tax entry is recorded at the net amount (0.6%) of the
taxable payroll.
a. True
b. False
Under FMLA, the time off must be used in one uninterrupted period of time.
a. True
b. False
HTMLENTITY#8203HTMLENTITYWhich of the following is a multicolumn form
used to assemble and summarize the data needed at the end of each payroll period?
a. HTMLENTITY#8203HTMLENTITYPayroll register
b. HTMLENTITY#8203HTMLENTITYReference inquiry form
c. HTMLENTITY#8203HTMLENTITYChange in payroll rate form
d. HTMLENTITY#8203HTMLENTITYEmployee history record
e. HTMLENTITY#8203HTMLENTITYNone of the above
There is a uniform rate of unemployment benefits payable by all states.
a. True
b. False
Employers may pay nonexempt employees who work fluctuating schedules a fixed
salary. In these cases, the extra pay is:
a. calculated at a time and onehalf rate.
b. calculated at a double time rate.
c. calculated at the regular rate of pay.
d. unpaid.
e. none of the above.
A company must withhold federal income taxes from payments made to independent
contractors in which of the following cases?
a. When there is a signed contract between the parties.
b. When the contractor is paid $400.
c. When the contractor is a corporation.
d. When the contractor has not provided a taxpayer identification number and the
contract is $600 or more.
e. All of the above.
Included under the definition of employees for FUTA purposes are:
a. independent contractors.
b. insurance agents paid solely on commission.
c. student nurses.
d. officers of a corporation.
e. members of partnerships.
State and local government employers must make their tax deposits according to a
different schedule than private employers.
a. True
b. False
On Form 940, even if the total FUTA tax is more than $500, there is no listing of
quarterly federal unemployment tax liabilities.
a. True
b. False
An employer can credit up to $5.12 of a tipped employee’s minimum wage as coming
from the tips received by that employee.
a. True
b. False
The payroll register is a separate payroll record that is kept on each employee.
a. True
b. False
The Fair labor Standards Act has set the current minimum hourly rate of pay at:
a. $10.00
b. $7.25
c. $7.75
d. $5.00
e. $8.50
HTMLENTITY#8203HTMLENTITYWhich of the following levies a graduated tax on
the earnings of most employees and is deducted from their gross pay?
a. HTMLENTITY#8203HTMLENTITYIncome tax withholding laws
b. HTMLENTITY#8203HTMLENTITYFederal Unemployment Tax Act
c. HTMLENTITY#8203HTMLENTITYFair Labor Standards Act
d. HTMLENTITY#8203HTMLENTITYFederal Insurance Contributions Act
e. HTMLENTITY#8203HTMLENTITYEmployee Retirement Income Security Act
The FLSA sets no limits upon the number of hours that a 15yearold person may work
so long as the overtime pay provisions are met.
a. True
b. False
Instruction 31
Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI: 6.20% $127,200 $7,886.40
Employee and Employer HI: 1.45% No limit No maximum
Selfemployed OASDI: 12.4% $127,200 $15,772.80
Selfemployed HI: 2.9% No limit No maximum
HTMLENTITY#8203HTMLENTITY
Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to
selfemployed.
HTMLENTITY#8203HTMLENTITY
Exhibit 41:
Use the following tables to calculate your answers.
Refer to Exhibit 41. Determine the income tax to withhold from the biweekly wages of
the following employees (wagebracket):
Karen Overton (single, 0 allowances), $900 wages__________________
Nancy Haller (married, 4 allowances), $1,000 wages__________________
Alan Glasgow (married, 1 allowance), $980 wages__________________
Joseph Kerr (single, 4 allowances), $720 wages__________________
Ginni Lorenz (single, 1 allowance), $580 wages__________________
Instruction 31
Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI: 6.20% $127,200 $7,886.40
Employee and Employer HI: 1.45% No limit No maximum
Selfemployed OASDI: 12.4% $127,200 $15,772.80
Selfemployed HI: 2.9% No limit No maximum
HTMLENTITY#8203HTMLENTITY
Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to
selfemployed.
HTMLENTITY#8203HTMLENTITY
Exhibit 61
The totals from the first payroll of the year are shown below.
Total
EarningsFICA
OASDIFICA
HIFIT
W/HState
TaxUnion
DuesNet
Pay
$36,195.10 $2,244.10 $524.83$6,515.00$361.95$500.00$26,049.22
Refer to Exhibit 61. Journalize the entry to record the employer’s payroll taxes
(assume a SUTA rate of 3.7%).
Instruction 31
Use the following tax rates, ceiling and maximum taxes:
Employee and Employer OASDI: 6.20% $127,200 $7,886.40
Employee and Employer HI: 1.45% No limit No maximum
Selfemployed OASDI: 12.4% $127,200 $15,772.80
Selfemployed HI: 2.9% No limit No maximum
HTMLENTITY#8203HTMLENTITY
Employee HI: Plus an additional 0.9% on wages over $200,000. Also applicable to
selfemployed.
HTMLENTITY#8203HTMLENTITY