Ch11-Quiz Review-Dual Credit Accounting

Employees' payments for federal income taxes withheld and social security and Medicare taxes are periodically

• sent directly to the Internal Revenue Service

• deposited in a special-purpose bank account, controlled by the company, until year-end when the funds are sent to the U.S. Treasury Department

• sent to the local office of the Internal Revenue Service

• deposited in a government-authorized financial institution

Under what circumstance would an employer be subject to the semiweekly deposit schedule rule?

• total taxes reported during the lookback period exceed $50,000

• total taxes reported during the lookback period are below $50,000

• total number of employees exceeds 250

• total number of employees is below 250

Both the employer and the employee are responsible for paying:

• social security, Medicare, and FUTA taxes.

• FUTA taxes

• SUTA taxes.

• social security and Medicare taxes.

The entry to record a deposit of federal income taxes withheld and social security and Medicare taxes owed would include a:

• debit to an expense account and credit to one or more liability accounts.

• debit to an asset account and credit to an expense account

• debit to one or more liability accounts and credit to an asset account.

• debit to one or more expense accounts and credit to one or more liability accounts

Which of the following forms is not filed on an annual basis?

• Form W-2

• Form W-3

• Form 940

• Form 941

Which of the following taxes is both reported on Form 941 and solely withheld from employee earnings (therefore not paid by the employer)?

• Social security tax

• Federal income tax

• Medicare tax

• Federal unemployment tax

Which of the following is not a destination where an employer might send Form W-2?

• the Social Security Administration

• the workers’ compensation insurance provider

• the employee

• he state tax department

If an employer does not deduct enough taxes from an employee’s earnings, the business pays the difference when filing Form 941. This deficiency is then reported within which account in the journal?

• Payroll Taxes Expense

• Social Security Tax Payable

• Employee Income Tax Payable

• Workers’ Compensation Insurance Expense

Which of the following statements is not correct?

• The federal government allows a credit, or reduction, in the federal unemployment tax for amounts charged by the state for unemployment taxes.

• The normal federal unemployment tax rate of 0.6% (or 6.0% less the state unemployment tax credit of 5.4%) changes if favorable experience ratings change the state unemployment tax rate.

• The earnings limits for the federal and the state unemployment tax are usually the same, $7,000.

• Under the experience rating system, the state tax rate may be reduced to less than 1 percent for businesses that provide steady employment. In contrast, some states levy penalty rates as high as 10 percent for employers with poor records of providing steady employment.

All of the following are internal control procedures that are recommended to protect payroll operations except:

• make voluntary deductions from employee earnings based only on a signed authorization from the employee.

• keep payroll records in locked files.

• retain all Forms W-4

• assign new employees to work in payroll operations