All employers of one or more persons must file an application for an identification
number.
a. True
b. False
Form 941 is due on or before the 15th day of the month following the close of the
calendar quarter for which the return is made.
a. True
b. False
Selfemployed persons include their selfemployment taxes in their quarterly payment of
estimated federal income taxes.
a. True
b. False
Under the Consumer Credit Protection Act, disposable earnings are the earnings
remaining after any deductions for health insurance.
a. True
b. False
FIT Payable is a liability account used to record employees’ withheld federal income tax
and also the employer’s match of that tax.
a. True
b. False
Each year, the FICA (OASDI portion) taxable wage base is automatically adjusted
whenever a cost of living raise in social security benefits becomes available.
a. True
b. False
In calculating a “grossup” amount of a bonus payment, an employer does not use the
OASDI/HI tax rates in the formula.
a. True
b. False
To calculate the overtime pay rate for a commissioned worker, divide the total
commission by the hours worked, and then take onehalf of the resulting rate of pay.
a. True
b. False
Before any federal income taxes may be withheld, there must be, or must have been, an
employeremployee relationship.
a. True
b. False
In its definition of employee, FICA clearly distinguishes between classes or grades of
employees.
a. True
b. False
The Social Security Act requires workers to obtain a new account number each time
they change jobs.
a. True
b. False
The SelfEmployment Contributions Act imposes a tax on the net earnings from
selfemployment derived by an individual from any trade or business.
a. True
b. False
Rest periods and coffee breaks may be required by all of the following except:
a. a union contract.
b. a state legislation.
c. a municipal legislation.
d. the FLSA.
e. none of the above.
The FICA taxes on the employer represent both business expenses and liabilities of the
employer.
a. True
b. False
An employer must pay the quarterly FUTA tax liability if the liability is more than:
a. $3,000.
b. $500.
c. $1,000.
d. $1.
e. $100.
The requisition for personnel form is sent to the Payroll Department so that the new
employee can be properly added to the payroll.
a. True
b. False
FUTA was designed to ensure that workers who are covered by pension plans receive
benefits from those plans.
a. True
b. False
Union Dues Payable is a liability account credited with the deductions made from union
members’ wages for their union dues.
a. True
b. False
Violators of the overtime provision of the FLSA are required to pay the unpaid overtime
at a rate of triple the employee’s rate.
a. True
b. False
When withheld union dues are turned over to the union by the employer, a journal entry
is made debiting the liability account and crediting the cash account.
a. True
b. False
Noncash fringe benefits that are provided employees are treated as nontaxable income
and thus are excluded from federal income tax withholding.
a. True
b. False
Each payday, the total of net pays that the employer incurs is the wage expense that
must be debited.
a. True
b. False
FICA includes partnerships in its definition of employer.
a. True
b. False
Deductions from gross pay in the payroll register are reflected on the credit side of the
journal entry to record the payroll.
a. True
b. False
On Schedule B of Form 941, the employer does not show the date of each tax deposit
during the quarter.
a. True
b. False
Under the federal income tax withholding law, income taxes are not withheld from the
value of meals that employers furnish workers on the employers’ premises for the
employers’ convenience.
a. True
b. False
A waiter receives cash tips amounting to $120 in a month. The waiter must report the
amount of the cash tips to the employer by the 10th of the month following the month
they receive the tips.
a. True
b. False
FICA does not consider the first six months of sick pay as taxable wages.
a. True
b. False
All taxable noncash fringe benefits received during the year can only be added to the
employees’ taxable pay on the last payday of the year.
a. True
b. False
Tips received by employees in excess of tip credit amount are not included as
disposable earnings subject to garnishment
a. True
b. False
Under the provisions of the Consumer Credit Protection Act, an employer can discharge
an employee simply because the employee’s wage is subject to garnishment for a single
indebtedness.
a. True
b. False
a. Complete Part 2 of Form 940 based on the following information:
Total payroll for the year $913,590
Payroll to employees in excess of $7,000 $421,930
Employer contributions into employees’ 401(k) plans $23,710
Source: Internal Revenue Service
b. If the employer is located in California, which has a credit reduction of 1.5%,
what would be the amount of the credit reduction?
c. Complete Part 5 of Form 940 for the California employer given the breakdown of
FUTA taxable
wages for the year to be:
First quarter $237,000
Second quarter $168,000
Third quarter $54,000
Fourth quarter $8,950
Yearly total $467,950
Monthly depositors are required to deposit their taxes by the 15th day of the following
month.
a. True
b. False
For FUTA purposes, the cash value of remuneration paid in any medium other than cash
is not considered taxable wages.
a. True
b. False