11) The entry to record the payroll tax expense would include:

A) a credit to Federal Income Taxes Payable.

B) a credit to Cash.

C) a credit to FICA (OASDI and Medicare) Taxes Payable.

D) a credit to Wages Payable.

 

12) The employer’s total FICA, SUTA, and FUTA tax is recorded as:

A) a debit to Payroll Tax Expense.

B) a credit to Payroll Tax Expense.

C) a credit to Payroll Tax Payable.

D) a debit to Payroll Tax Payable.

13) Which of the following statements is false?

A) Payroll Tax Expense is an expense account.

B) FICA-Social Security Tax Payable increases on the credit side of the account.

C) Payroll Tax Expense increases on the debit side of the account.

D) SUTA Tax Payable increases on the debit side of the account.

 

14) Which of the following statements is true?

A) Payroll Tax Expense increases on the debit side of the account.

B) FICA-Social Security Tax Payable is a liability.

C) Payroll Tax Expense has a debit normal balance.

D) All of these answers are correct.

 

15) As the Prepaid Workers Compensation is recognized, the amount will transfer to:

A) Workers Compensation Insurance Payable.

B) Workers Compensation Insurance Expense.

C) Cash.

D) Payroll Tax Expense.

16) Grammy’s Bakery had the following information for the pay period ending June 30:

 

Employee Name

Pay

rate

Hours worked

Cumulative earnings

Department

Federal income tax withheld

P. Ganster

$ 2,000

Salaried

$ 12,000

Kitchen

$ 86.00

T. Baker

10.00/hr

50

6,500

Office

22.00

 

Assume:

FICA-OASDI applied to the first $106,800 at a rate of 6.2%.

FICA-Medicare applied at a rate of 1.45%.

FUTA applied to the first $7,000 at a rate of 0.8%.

SUTA applied to the first $7,000 at a rate of 5.6%.

State income tax is 3.8%.

 

Given the above information, what would be the amount applied to Office Salaries Expense?

A) Debit $550

B) Credit $550

C) Debit $500

D) Credit $500

 

17) Grammy’s Bakery had the following information for the pay period ending June 30:

 

Employee Name

Pay

rate

Hours worked

Cumulative earnings

Department

Federal income tax withheld

P. Ganster

$ 2,000

Salaried

$ 12,000

Kitchen

$ 86.00

T. Baker

10.00/hr

50

6,500

Office

22.00

 

Assume:

FICA-OASDI applied to the first $106,800 at a rate of 6.2%.

FICA-Medicare applied at a rate of 1.45%.

FUTA applied to the first $7,000 at a rate of 0.8%.

SUTA applied to the first $7,000 at a rate of 5.6%.

State income tax is 3.8%.

 

Given the above information, what would be the amount applied to Kitchen Salaries Expense?

A) Debit $12,000

B) Credit $12,000

C) Debit $2,000

D) Credit $2,000

18) Great Lakes Tutoring had the following payroll information on February 28:

 

Employee

Gross Pay

Cumulative Earnings Prior to this Payroll

R Hill

$4,000

$4,000

 

Assume:

FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%

State Unemployment tax rate is 2% on the first $7,000

Federal Unemployment tax rate is 0.8% on the first $7,000

 

Using the information above, the journal entry to record the payroll tax expense for Great Lakes Tutoring would include:

A) a debit to Payroll Tax Expense in the amount of $390.

B) a credit to FUTA Payable for $24.

C) a credit to SUTA Payable for $60.

D) All of the above are correct.

19) Great Lakes Tutoring had the following payroll information on February 28:

 

Employee

Gross Pay

Cumulative Earnings Prior to this Payroll

R Hill

$4,000

$4,000

 

Assume:

FICA tax rates are: OASDI 6.2% on a limit of $106,800 and Medicare 1.45%

State Unemployment tax rate is 2% on the first $7,000

Federal Unemployment tax rate is 0.8% on the first $7,000

 

Using the information above, the journal entry to record the employee’s tax expense would include:

A) a debit to Payroll Tax Expense in the amount of $4,000.

B) a debit to Wages and Salaries Expense in the amount of $4,000.

C) a credit to Cash in the amount of $4,000.

D) a credit to FUTA Payable for $24.

20) Wages and Salaries Expense is:

A) equal to net pay.

B) equal to gross pay.

C) equal to the employer’s taxes.

D) None of the above are correct.

 

 

 



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