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Exam 6: Analyzing and Journalizing Payroll Transactions

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Question 21

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The employer's payroll tax expenses are recorded by all employers at the time these taxes are actually paid.

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Question 22

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FICA Taxes Payable-OASDI is a liability account debited for the employer's portion of the FICA tax.

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Question 23

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When the federal tax deposit is made, the employees' and employer's shares of FICA taxes are paid along with the employees' FIT taxes withheld.

In the adjusting entry to accrue wages at the end of the accounting period, there is no need to credit any tax withholding accounts.

Carmen Gaetano worked 46 hours during this payweek. He is paid time-and-a-half for hours over 40 and his pay rate is $17.90/hour. What was his overtime premium pay for this workweek?

When recording the deposit of FUTA taxes owed, the proper entry is:

Which of these accounts shows the total gross earnings that the employer incurs as an expense each payday?

FUTA Taxes Payable is an expense account in which are recorded the employer's federal unemployment taxes.

The FUTA tax part of the payroll tax entry is recorded at the net amount (0.6%) of the taxable payroll.

Service charges that are passed on to the employee by the employer are not part of the disposable earnings subject to garnishment.

Since the credit against the FUTA tax (for SUTA contributions) is made on Form 940, the employer's payroll tax entries should include the FUTA tax at the gross amount (6.0%).

If employees must contribute to the state unemployment fund, this deduction should be shown in the payroll tax entry.

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.

In order to prepare Forms W-2, an employer would utilize the employee's earnings record.

Tax withholdings from employees' pays reduce the amount of the debit to Salary Expense in the payroll entry.

When recording FICA taxes, different liability accounts should be set up for the employees' and employer's portions of the tax.

Posting to the general ledger for payroll entries is done only at the end of each calendar year.

The wage and salaries expense account is an operating expense account debited for total net pay each payroll period.

The entry to record the employer's payroll taxes usually includes credits to the liability accounts for FICA (OASDI and HI), FUTA, and SUTA taxes.

Since the FUTA tax is a social security tax, it can be charged to the same expense account as the other payroll taxes on the employer, the payroll taxes account.