ACTG 66 Final Exam (ch 1-4) – Flashcards

The Social Security Act requires workers to obtain a new account number each time they change jobs.

Which of the following is not an expense of the employer? A. Union dues withheld B. FUTA tax C. SUTA tax D. FICA tax - HI E. FICA tax - OASDI

"Dumping" is legal in all but a few states.

The person who is not an authorized signer of Form 940 is: A. All of these are authorized signers B. the president, if a corporation C. the accountant from the company's independent auditing firm. D. the individual, if a sole proprietorship E. a fiduciary, if a trust

Each payday, the total of net pays that the employer incurs is the wage expense that must be debited.

In recording the monthly adjusting entry for accrued wages at the end of the accounting period, the amount of the adjustment would usually be determined by: A. using the same amount as the prior month's adjustment. B. a percentage of the previous week's gross payroll. C. a percentage of the previous week's net payroll. D. collecting the timesheets for the days accrued. E. using the wages of the salaried workers only.

Cash tips of $20 or more received by a tipped employee in a calendar month are treated as remuneration subject to federal income tax withholding.

A company must withhold federal income taxes from payments made to independent contractors in which of the following cases? A. When the contractor is paid more than $10,000 B. When there is a signed contract between the parties C. When the contractor has not provided a taxpayer identification number and the contract is $600 or more D. When the contractor is a corporation E. All of these.

In most states, the contribution reports and the wage information reports are filed quarterly.

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.

Under the Equal Pay Act: A. employers must pay a married male a higher wage rate than a single female if both are performing equal work. B. white-collar workers are exempt from its requirements. C. wage differentials based on a seniority system are allowed. D. if there is an unlawful pay differential, employers may reduce the higher rate to equal the lower rate. E. none of these.

Which of the following is not part of the social security program? A. All are part of the social security program. B. Medicare C. Self-Employment Contributions Act D. Federal Income Tax Law E. Federal Old-Age and Survivors' Trust Fund

In January 2014, the minimum hourly wage was: A. $9.35 B. $7.15 C. $10.85 D. $8.15 E. None of these.

A stated percentage of revenue paid an employee who transacts a piece of business or performs a service is called: A. a remunerative salary. B. a commission. C. None of these. D. a piece rate. E. a regular hourly rate.

Which of the following cannot be included in a cafeteria plan? A. Group-term life insurance (first $50,000 of coverage) B. Health insurance C. Self-insured medical reimbursement plan D. Educational assistance E. Dependent care assistance (first $5,000)

The FLSA sets no limits upon the number of hours that a 15-year-old person may work so long as the overtime pay provisions are met.

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

FICA excludes from coverage all of the following kinds of employment except: A. federal government secretaries hired in 1990. B. domestic service performed in a college sorority by a student. C. service performed by a 16-year-old child in the employ of the mother. D. baby sitting service performed by a 35-year-old person who receives $40 in cash during the calendar quarter. E. services performed by a railroad worker for an employer covered by the Railroad Retirement Tax Act.

Each year, the FICA (OASDI portion) taxable wage base is automatically adjusted whenever a cost of living raise in social security benefits becomes available.

The entry made at the end of the accounting period to record wages incurred but unpaid is: A. Wages Expense, Payroll Taxes (DR) Wages Payroll (CR) B. Wages Expense (DR) Wages Payable (CR) C. Wages Payable (DR) Cash (CR) D. Wages Expense (DR) FICA Taxes Payable—OASDI, FICA Taxes Payable—HI, FIT Payable, Wages Payable (DR) E. Wages Expense (DR) Cash (CR)

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

Persons eligible for deductible IRA contributions may put aside a specified amount of their compensation without paying federal income taxes on that amount.

Under the Consumer Credit Protection Act, disposable earnings are the earnings remaining after any deductions for health insurance.

Which of the following acts deals with the minimum wage paid to laborers for contractors on federal government construction contracts? A. Fair Labor Standards Act B. None of these C. Occupational Safety and Health Act D. McNamara-O'Hara Service Contract Act E. Walsh-Healey Public Contracts Act

Included under the definition of employees for FUTA purposes are: A. insurance agents paid solely on commission. B. officers of a corporation. C. student nurses. D. members of partnerships. E. independent contractors.

Barr fails to make a timely deposit of FICA taxes and withheld income taxes until five days after the due date. The penalty facing Barr is: A. 2% of the undeposited taxes. B. 25% of the undeposited taxes. C. 5% of the undeposited taxes. D. 10% of the undeposited taxes. E. none of these.

Under the safe harbor rule, when employers deposit their tax liabilities, they may have a shortfall of no more than $200 without incurring any penalty.

An exception to the protection that the Age Discrimination in Employment Act provides for all workers over 40 involves executives who are 65 or older and who have held high policy-making positions during the two-year period prior to retirement.

The Age Discrimination in Employment Act provides protection to virtually all workers over the age of: A. 65 B. 18 C. 40 D. 21 E. 55

For state income tax purposes, all states treat 401(k) plan payroll deductions as nontaxable.

Which of the following records lists all employees who earn remuneration, the amount of remuneration, the deductions, and the net amount paid for each payroll period? A. Employee history record B. Reference inquiry form C. Payroll register D. Change in payroll rate form E. None of these

In calculating a "gross-up" amount of a bonus payment, an employer does not use the OASDI/HI tax rates in the formula.

Which of the following accounts is an expense account in which an employer records the FICA, FUTA, and SUTA taxes? A. Salaries Payable B. SUTA Taxes Payable C. Wages Expense D. Payroll Taxes E. None of these

If an employer fails to file an employment tax return on the due date, a penalty based on a certain percentage of the amount of tax required to be reported may be added to the tax.

Dismissal pay is considered taxable wages under FICA.

Employers may adopt the practice of recording an employee's starting and stopping time to the nearest quarter of an hour.

In order to obtain the maximum credit allowed against the federal unemployment tax, the employer must have paid its SUTA contributions by the due date of Form 940.

To be designated a semiweekly depositor, how much in employment taxes would an employer have reported for the four quarters in the lookback period? A. Less than $50,000. B. More than $50,000. C. More than $100,000. D. None of these. E. More than $2,500.

Rest periods and coffee breaks may be required by all of the following except: A. none of these. B. a municipal legislation. C. the FLSA. D. a state legislation. E. a union contract.

Employees who are receiving remedial education may work up to 10 hours overtime each week without receiving overtime pay.

On August 5, Hunt filed an amended Form W-4 to show a decrease in the number of allowances claimed. Hunt's employer must put the new withholding allowance certificate into effect before the next weekly payday on August 7.

Arch gives you an amended Form W-4 dated March 13, 2013, on which he claims two additional withholding allowances. He asks you to refund the excess taxes that were deducted from January 1 to March 13 when Arch claimed only one withholding allowance. You should: A. inform Arch that you will appoint a committee to study his request. B. inform Arch that you are unable to repay the over withheld taxes that were withheld before March 13 and that the adjustment will have to be made when he files his annual income tax return. C. repay the over withheld taxes on Arch's next payday. D. tell Arch to write the IRS immediately and ask for a refund of the over withheld taxes. E. tell Arch that you will spread out a refund of the over withheld taxes equally over the next six pays.

An employer must file an information return under all of the following conditions except: A. to report commissions of $500 paid to a self- employed salesman. B. An information return must be filed under each of the above conditions. C. to report the wages totaling $600 paid to an independent contractor during the calendar year. D. to report $1,000 of compensation paid to an individual who is not an employee. E. to report dividends totaling $600 paid to an individual during the calendar year.

In May 2013, workers who receive the minimum hourly wage are paid $6.10 an hour.

The employee's earnings record provides information for each of the following except: A. preparing the payroll register. B. completing the journal entry to record the payroll. C. preparing reports required by state unemployment compensation laws. D. determining when the accumulated wages of an employee reach cutoff levels. E. completing Forms W-2.

Under ERISA, vesting conveys to employees the right to share in a retirement fund in the event they are terminated before the normal retirement age.

Which of the following payments are taxable payments for federal unemployment tax? A. Value of meals and lodging furnished employees for the convenience of the employer B. Caddy fees C. Courtesy discounts to employees and their families D. Workers' compensation payments E. Christmas gifts, excluding noncash gifts of nominal value

For which of the following payments is the employer required to withhold federal income taxes? A. Advances made to sales personnel for traveling expenses B. All of these C. Minister of Presbyterian church D. Tipped employee's monthly tips of $120 E. Deceased person's wages paid to the estate

Employment application forms are usually discarded when the applicant is hired.

Prehire questions pertaining to religion, gender, national origin, or age are allowed if: A. they are not in written form. B. these factors are bona fide occupational qualifications for the job. C. only foreign-born applicants are asked these questions. D. the applicant is married. E. all employees are asked the same questions.

An employer must pay the quarterly FUTA tax liability if the liability is more than: A. $500 B. $1,000 C. $100 D. $1 E. $3,000

Which of the following payments are not taxable for FICA? A. Dismissal pay. B. Back-pay awards. C. Difference between employees' regular wages and the amount received for jury duty. D. Retroactive wage increase. E. Wage supplements to cover difference between employees' salaries and their military pay.

Which of the following provides for a reduction in the employer's state unemployment tax rate based on the employer's experience with the risk of unemployment? A. Title XII advances B. Pooled-fund laws C. None of these D. Experience-rating plan E. Voluntary contribution

The trend toward outsourcing of payroll operations has weakened in recent years.

Payments made to a bona fide profit-sharing plan that meets the standards set by the secretary of labor's regulations are not deemed wages in determining the regular rate of pay.

Under the continental system of recording time, 9:20 p.m. is recorded as: A. 2120 B. None of these. C. P2120 D. 9:20P E. 2220

In the case of a part-time employee, the employer pays a FUTA tax on only the first $14,000 of earnings (double the regular limit).

Services performed in the employ of a religious organization that is exempt from federal income tax are also exempt from FUTA coverage.

The Self-Employment Contributions Act imposes a tax on the net earnings from self-employment derived by an individual from any trade or business.

The FICA tax rates for the self-employed are: A. 4.2% (OASDI) and 2.9% (HI). B. 4.2% (OASDI) and 1.45% (HI). C. 10.0% (OASDI) and 1.0% (HI). D. none of these. E. 12.4% (OASDI) and 1.45% (HI).