Accounting - Chapter 12

Qualified retirement plans are approved by an act of Congress.

• 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 solely from the number of withholding allowances.

• True
• False

The investment income in a Roth IRA is not subject to federal income taxes when withdrawn.

• True
• False

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

• True
• False

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

• True
• False

 Social security tax is paid by both employees and employers.

• True
• False

Employee regular earnings are calculated as.

• a. regular hours times regular rate.
• b. total hours divided by regular rate
• c. total hours plus overtime rate.
• d. overtime hours minus overtime rate.

The larger the number of withholding allowances claimed, the larger the amount of income tax withheld.

• True 
• False