Accounting-Chapter 12 Test Review

Businesses use payroll records to inform employees of their annual earnings and to prepare payroll reports for the government.

• True

• False

All deductions from employee wages are recorded in a payroll register.

• True

• False

The first task in preparing a payroll is to determine the number of days worked by each employee.

• True

• False

Total earnings are sometimes referred to as net pay or net earnings.

• True

• False

Payroll taxes withheld represent a liability for an employer until payment is made.

• True

• False

When an employee's earnings exceed the tax base, no more social security tax is deducted.

• True

• False

The amount of income tax withheld from each employee's total earnings is determined from the number of withholding allowances and by the employee's marital status.

• True

• False

Employee total earnings are calculated as regular hours X regular rate, plus overtime hours X overtime rate.

• True

• False

A business is required by law to withhold certain payroll taxes from employee salaries.

• True

• False

A single person will have less income tax withheld than a married employee.

• True

• False