Accounting 1 Chapter 13 Vocabulary

Front

What is the Wage and Tax Statement that summarizes an employee’s earnings and amounts withheld for federal, state, and local taxes?

Back

Form W-2

Front

What is the expense account used to record the employer’s payroll taxes?

Back

Payroll Tax Expense

Front

What is the transmittal of Wage and Tax Statements that summarizes the information contained on the employees’ Forms W-2 and accompanies the Forms W-2 sent to the federal government?

Back

Form W-3

Front

What is the system used by large businesses to deposit tax payments by electronic funds transfer?

Back

Electronic Federal Tax Payment System

Front

What is the law that requires employers to pay employment taxes to individual states?

Back

State Unemployment Tax Act

Front

What is the purpose of Form W-2?

Back

To report an employee's annual wages and the amount of taxes withheld from their paycheck.

Front

What does Payroll Tax Expense include?

Back

Employer's share of Social Security and Medicare taxes, as well as federal and state unemployment taxes.

Front

What is the significance of Form W-3?

Back

It summarizes the total earnings, Social Security wages, and withholding for all employees for the year.

Front

What is the Electronic Federal Tax Payment System (EFTPS)?

Back

A free service provided by the U.S. Department of the Treasury to pay federal taxes electronically.

Front

What are the consequences of not complying with the State Unemployment Tax Act?

Back

Employers may face penalties, fines, and increased tax rates.