Chapter 8, TEST 8B

8-2

Chapter 8, TEST 8B

Name ______

Date ______

SCORING RECORD

Section / Total Possible / Deductions / Student
Score
A / 30
B / 30
C / 10
D / 30
Total / 100

Section A

DIRECTIONS: Each of the following statements is true or false. Indicate your choice by writing in the Answers column T for a true answer or F for a false answer. (2 points for each correct answer)

For

Answers Scoring

1. Companies must accumulate payroll data both for

the business as a whole and for each employee. ______

2. An employee is one who is not under

the control and direction of an employer with

regard to the performance of services. ______

3. Payroll accounting procedures apply to both

employees and independent contractors. ______

4. Compensation expressed in terms of hours, weeks,

or units produced for skilled or unskilled labor

is usually referred to as wages. ______

5. Employers are required to obtain a W-4 Employee’s

Withholding Allowance Certificate for every

employee. ______

6. An employee's gross pay is typically less than the

net pay. ______

7. The Federal Insurance Contribution Act (FICA)

requires most employers to withhold certain amounts

from employees' earnings for Social Security

and Medicare programs. ______

8. Under federal law, employers are required to

withhold certain amounts from the total earnings

of each employee to be applied toward the payment

of the employee's federal income tax. ______

9. A withholding allowance is an amount on which no

federal income tax is withheld from the

employee's pay. ______

10. If an employee’s regular hourly rate is $7.00 per

hour, the time and one half overtime rate will be

$10.00. ______

11. The employee's earnings record is a summary of

the annual earnings of that employee. ______

12. The journal entry to record payroll transactions

for the accounting period includes a debit to Wages

and Salaries Expense for the net pay. ______

13. Separate accounts are kept for each type of

earnings deduction. ______

14. A manual payroll system is more efficient

than an electronic payroll system. ______

15. When a direct deposit is made by the employer

to the employee's bank, the employee does not

handle the paycheck. ______

Section B

Directions: Complete each of the following statements by writing in the Answers column the letter of the word or words that correctly completes each statement. (3 points each)

For

Answers Scoring

1. Examples of employees include all of the following

except: (A) maintenance workers; (B) sales clerks;

(E) sales managers. ______

2. Compensation normally expressed in biweekly,

monthly, or annual terms for managerial or

administrative services is called:

(A) a supplement; (B) a commission; (C) wages;

(D) payroll; (E) net pay. ______

3. Kelly Tong is paid one and one-half times the

regular hourly rate for all hours worked in excess

of 40 per week and double time for work on Sunday.

Tong's regular rate is $18 per hour. During the

week ended July 31, she worked 10 hours each day

from Monday through Friday, 6 hours on Saturday,

and 4 hours on Sunday. Tong's overtime earnings

for the week ended July 31 are: (A) $270; (B) $540;

4. Nancy Kramer receives a regular salary of $1,000 a

month and is entitled to overtime pay at the rate

of one and one-half times the regular hourly rate

for any time worked in excess of 40 hours per week.

Kramer's overtime hourly rate of pay is: (A) $5.77;

(B) $6.25; (C) $8.66; (D) $9.38; (E) $25.00. ______

5. An amount on which no federal income tax is

withheld from the employee's pay is call a(n):

(A) wage bracket amount; (B) withholding allowance;

(C)special withholding allowance; (D) additional

withholding allowance; (E)charge. ______

6. An example of a voluntary deduction is:

(A) Social Security; (B) Federal Income Tax;

7. A separate record of each employee's earnings

is called a(n): (A) payroll register; (B) employee's

earnings record; (C) payroll ledger; (D) payroll

check; (E)wage statement. ______

8. The account that should be credited for the total

income tax withheld from employee's earnings is:

(A) FICA Tax Payable; (B) FICA Tax Expense;

(C)Employees Income Tax Payable; (D) Employees

Income Tax Expense; (E) Cash. ______

9. The payroll register for the week ended

February 15, for Ms. Haney's law office indicated

gross salaries of $25,000 and total deductions of

$3,500. The debit to the Wages and Salaries

Expense ending February 15 would be: (A) $3,500;

(B)$21,500; (C) $25,000; (D) $28,500; (E) none

of these. ______

10. The outputs from a manual or an electronic payroll

accounting system include all the following

except: (A) payroll checks; (B) payroll registers;

(C)employee's earnings record; (D) plastic cards;

(E) C & D. ______

Section C

DIRECTIONS: Match the correct answer to the definition that best explains it. (2 points each)

_____ 1. A separate record of each employee's earnings.

_____ 2. A form used to assemble the data required at the end of

each payroll period.

_____ 3. Performs a service for a fee and does not work under the

control and direction of the company paying for the service.

_____ 4. Works under the control and direction of an employer.

_____ 5. A business that sells payroll record keeping services.

a. payroll processing center

b. employee

c. independent contractor

d. payroll register

e. employee earnings record

Section D

DIRECTIONS: Moschgat's Book Store has four employees who are paid on a weekly basis, receiving time and one-half for working more than 40 hours in any one week. The payroll data for the week ended June 30 is shown below. Complete the payroll register and journalize the payroll entry. Begin checks with check 500. (30 points total)

The Social Security rate is 6.2% and the Medicare rate is 1.45%.

Federal Unemployment is paid on the first $7,000 of each employee's earnings and the taxable amount has been entered for you.

Total and verify column totals.