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Accounting 2 Chapter 3

True/False
Indicate whether the statement is true or false.
 

 1. 

A business form used to record payroll information is called a payroll register.
 

 2. 

Typical employee benefits in which payments are made to employees for hours not worked include vacation time, sick leave time, and personal leave time.
 

 3. 

Electronic funds transfer eliminates the need for preparing payroll checks. Instead, each employee simply receives a statement of earnings and deductions.
 

 4. 

Laws for handling city, county, and state taxes vary.
 

 5. 

Employers make periodic payments to the government for all payroll taxes withheld from employees, as well as for employer payroll taxes.
 

 6. 

The only deductions that may be legally made from an employee's pay are those required by the federal, state, or local governments.
 

 7. 

The total amount earned by all employees for a pay period is called a payroll.
 

 8. 

Electronic funds transfer means depositing payroll checks directly to an employee's checking or savings account.
 

 9. 

A payroll register does not need to categorize earnings by department, since the employee earnings record provides the departmental information.
 

 10. 

The maximum amount of earnings on which a tax is calculated is called a tax table.
 

Multiple Choice
Identify the choice that best completes the statement or answers the question.
 

 1. 

Accumulated earnings on the employee earnings record are used to ____.
A.
show net pay to date
B.
indicate when an employee raise is due
C.
show total earnings for the quarter
D.
indicate when the tax base has been reached
 

 2. 

When all employees have cashed their payroll checks, the balance of the payroll bank account ____.
A.
equals zero
B.
equals the net pay for the period
C.
equals total earnings for the period
D.
none of the above
 

 3. 

Accumulated earnings are also known as ____.
A.
annual earnings
C.
total earnings
B.
year-to-date earnings
D.
none of the above
 

 4. 

Ross Wagner earns $8.00 per hour for all hours worked up to 40 each week. He earns 1 1/2 his hourly rate for all hours worked in excess of 40 hours. He is paid biweekly. If Ross works 43 hours one week and 40 hours the next week, his total biweekly earnings are ____.
A.
$604
C.
$676
B.
$640
D.
$712
 

 5. 

In a payroll register, the net pay represents ____.
A.
total earnings
B.
total earnings less total deductions
C.
departmental earnings
D.
total earnings less taxes withheld
 

 6. 

The frequency of employer payments of payroll taxes is determined by ____.
A.
the type of business
B.
the amount owed
C.
the employer's geographic location
D.
all of the above
 

 7. 

Current period earnings are $830.00. Deductions for the payroll period are $145.24. The previous period's accumulated earnings are $5,422.68. The new accumulated earnings are ____.
A.
$5,277.44
C.
$6,252.68
B.
$6,107.44
D.
$6,397.92
 

 8. 

Total sales for the previous month were $44,860. Sales discounts were $642 and sales returns and allowances were $418. Devon Bennett is paid a 1% commission on net sales. His commission for the previous month amounted to ____.
A.
$459.20
C.
$448.60
B.
$450.84
D.
$438.00
 

 9. 

The total amount earned by all employees for a pay period is called ____.
A.
deductions
C.
expenses
B.
withholding
D.
payroll
 

 10. 

Unemployment taxes are paid by the employer and are due to the ____.
A.
federal government only
B.
state government only
C.
both federal and state government
D.
federal or statement government
 

 11. 

A business form used to record payroll information is called a ____.
A.
check stub
C.
payroll register
B.
employee earnings record
D.
memorandum
 

 12. 

The date that appears at the top of the employee earnings record is ____.
A.
the last day of the payroll period
C.
the last day of the year
B.
the last day of the quarter
D.
the current date
 

 13. 

A tax which is not deducted from employee's pay is ____.
A.
social security tax
C.
federal unemployment tax
B.
state income tax
D.
federal income tax
 

 14. 

The amount due an individual for a pay period after deductions is referred to as ____.
A.
regular earnings
C.
total earnings
B.
overtime
D.
none of the above
 

 15. 

The money paid for employee services is called ____.
A.
deductions
C.
income
B.
salary
D.
expenses
 



 
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