In converting semimonthly wage rates to hourly rates, divide the semimonthly rate by 4
to arrive at the weekly rate, then divide this rate by the standard number of hours.
a. True
b. False
One of the provisions of coverage of the Civil Rights Act is that the employer must
have 15 or more workers.
a. True
b. False
If you, an employer, are filing 550 Forms W2, you must use electronic filing rather than
paper Forms W2.
a. True
b. False
Hourly employees who take work home without the permission of the employer do not
have to be paid for the work done at home.
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. Stys Company’s payroll for the year is $1,210,930. Of this
amount, $510,710 is for wages paid in excess of $7,000 to each individual employee.
The SUTA tax rate for the company is 3.2% on the first $7,000 of each employee’s
earnings.
a)The amount of FUTA tax for the year is __________.
b)The amount of SUTA tax for the year is __________.
FUTA and SUTA coverages extend to U.S. citizens working abroad for American
employers.
a. True
b. False
The payments to a cook employed by a college fraternity are excluded from federal
income tax withholding.
a. True
b. False
At the time that the entry is made to record the employer’s payroll taxes, the SUTA tax
is recorded at the net amount (0.6%).
a. True
b. False
In order to prepare Forms W2, an employer would utilize the employee’s earnings
record.
a. True
b. False
Provided employees can use the oncall time for their own purposes, this time is not
compensable.
a. True
b. False
Lidge Company of Texas (TX) is classified as a monthly depositor and pays its
employees monthly. The following payroll information is for the second quarter of 20.
WITHHOLDINGSEMPLOYER’S
WagesOASDIHIFITOASDIHI
April$86,100$ 5,338.20$1,248.46$ 9,650$ 5,338.20$1,248.45
May92,5005,735.001,341.2610,0055,735.001,341.25
June73,4004,550.801,064.308,9954,550.801,064.30
Totals$252,000$15,624.00$3,654.02$28,650$15,624.00$3,654.00
The number of employees on June 12, 20 was 11.
a. Complete the following portion of Form 941.
Source: Internal Revenue Service
b. Complete the following portion of Form 941.
Source: Internal Revenue Service
c. Complete Part 2 of Form 941.
Source: Internal Revenue Service
d. What are the payment due dates of each of the monthly liabilities assuming all
deposits were made on time, and the due date of the filing of Form 941 (year 20)?
FICA defines all of the following as wages except:
a. yearend bonuses.
b. standby payments.
c. total cash tips of $15 received by a tipped employee in May.
d. employees’ social security taxes paid for by the employer.
e. first six months of sick pay.
Barr fails to make a timely deposit of FICA taxes and withheld income taxes until five
days after the due date. The penalty facing Barr is:
a. 2% of the undeposited taxes.
b. 5% of the undeposited taxes.
c. 10% of the undeposited taxes.
d. 25% of the undeposited taxes.
e. none of the above.
Once the journal entry for the payroll is complete, the information is posted to the
appropriate general ledger accounts.
a. True
b. False
Which of the following acts gives a tax credit to employers for offering health insurance
to their employees?
a. Civil Rights Act
b. Fair Labor Standards Act
c. Family and Medical Leave Act
d. Patient Protection and Affordable Care Act
e. None of the above
Which of the following types of payments are not taxable wages for federal
unemployment tax?
a. Retirement pay
b. Cash prizes and awards for doing outstanding work
c. Dismissal pay
d. Bonuses as remuneration for services
e. Payment under a guaranteed annual wage plan
Those tasks that employees must perform and which include any work of consequence
performed for the employer are known as:
a. preliminary activities.
b. postliminary activities.
c. work activities.
d. principal activities.
e. none of the above.
Every employer is entitled to a 5.4 percent credit against the gross FUTA tax of 6.0
percent.
a. True
b. False
All of the following are properly defined as wages subject to the withholding of federal
income taxes except:
a. a yearend bonus.
b. kitchen appliances given by manufacturer in lieu of cash wages.
c. dismissal payment.
d. vacation pay.
e. payments made under worker’s compensation law.
Payments made to a bona fide profitsharing plan that meets the standards set by the
secretary of labor’s regulations are not deemed wages in determining the regular rate of
pay.
a. True
b. False
An employee’s marital status and number of withholding allowances never appear on
the payroll register.
a. True
b. False
The total of the net amount paid to employees each payday is credited to either the cash
account or the salaries payable account.
a. True
b. False
The tips received by a tipped employee are less than $5.12 of the minimum hourly tip
credit rate. The maximum permissible tip credit is:
a. $30 a month.
b. $5.12 an hour.
c. 45% of the employee’s minimum wage.
d. 50% of the employee’s minimum wage.
e. the amount of tips actually received by the employee.
The total cost of workers’ compensation insurance is borne by the employees.
a. True
b. False
Which of the following forms is used to report the amount of distributions from pension
and retirement plans?
a. Form W2c
b. Form 1099R
c. Form 1099PEN
d. Form W3p
e. Form W4