Payroll Accounting

Question 1

What is FICA

Answer 1

Federal Insurance Contribution Act - Contributing to Social Security (OASDI) and Medicare (HI)

Question 2

What is a payroll register?

Answer 2

Multicolumn form used to assemble the data needed for payroll purposes

Question 3

What is a W2?

Answer 3

Wage and tax statement used by an employer to report wages paid and by an employee to file annual taxes

Question 4

What is a W4?

Answer 4

Employee’s tax withholding

Question 5

What is a Form I-9?

Answer 5

Identifies the employee and verifies authorization to work in the United States

Question 6

When do employers have to give their employees their W2 for the previous year?

Answer 6

January 31st

Question 7

What is the formula to calculate net pay?

Answer 7

Gross pay - taxes and deductions

Question 8

TRUE/FALSE? FUTA is a tax levied to pay state and federal administrative expenses of the unemployment program?

Answer 8

TRUE

Question 9

What does the Fair Labor Standards Act Regulate?

Answer 9

Minimum wage and overtime pay requirements

Question 10

TRUE/FALSE? Under FLSA, employers must keep records of hours, wages, and overtime pay

Answer 10

TRUE

Question 11

What states do not have state income tax?

Answer 11

1) Alaska 2) Florida 3) Nevada 4) New Hampshire 5) South Dakota 6) Texas 7) Washington 8) Wyoming

Question 12

TRUE/FALSE? SUTA is used to pay unemployment benefits

Answer 12

TRUE

Question 13

What are the two taxes under FICA that are used to pay employers and employees?

Answer 13

OASDI (Social Security) and HI (Medicare)

Question 14

TRUE/FALSE? Income taxes can only be imposed by the federal government

Answer 14

FALSE

Question 15

TRUE/FALSE? EEO prohibits hiring discrimination

Answer 15

TRUE - EEO (Equal Employment Opportunity)

Question 16

How long does FMLA protect and employee’s job for?

Answer 16

12 weeks

Question 17

Current minimum wage hourly rate

Answer 17

$7.25

Question 18

TRUE/FALSE? FMLA guarantees paid leave for employees

Answer 18

FALSE - FMLA guarantees UNPAID leave

Question 19

What is vesting?

Answer 19

Conveys to employees the right to share in a retirement fun in the event they are terminated before the normal retirement age

Question 20

A weekly payroll frequency has ____ pay periods

Answer 20

52

Question 21

A bi-weekly payroll frequency has ____ pay periods

Answer 21

26

Question 22

A semi-monthly payroll frequency has ____ pay periods

Answer 22

24

Question 23

A monthly payroll frequency has ____ pay periods

Answer 23

12

Question 24

When is overtime pay required under FLSA?

Answer 24

When an employee works over 40 hours in a calendar week

Question 25

A "tipped employee" is one who engages in an occupation in which tips of more than ____ a month are regularly recieved

Answer 25

$30 per month

Question 26

How is an employee who is paid on a "piece-rate" basis compensated?

Answer 26

Paid by "piece" produced

Question 27

Under what parameters are tips considered taxable wages?

Answer 27

When more than $20 per month are regularly received

Question 28

Under enterprise coverage, all employees of a business are covered by FLSA if the organization is categorized as... (Hint: 7)

Answer 28

1. Hospital 2. Nursing Home 3. An institution for the mentally ill 4. An institution for the mentally or physically disabled and gifted children 5. Preschool, Elementary School, or Secondary School, 6. An institution of higher education 7. A public agency

Question 29

What penalties can be imposed on an employer for violating FLSA? (Hint: 5)

Answer 29

1. Backpay 2. Civil Penalties 3. Liquidated Damages 4. Hot Goods Injunction 5. Attorney Fees & Court Costs

Question 30

What employer returns are required for Social Security? (Hint: 2)

Answer 30

1. A quarterly tax and information return form (Form 941) 2. An annual return of withheld federal income taxes (Form 944)

Question 31

What conditions must be met for an employee to be considered "covered" under FICA (Hint: 3)

Answer 31

1. The comp the individual receives is "taxable" wages as defined by FICA law 2. The individual is an "employee" as defined by the common law relationship 3. The service the individual is rendering "employment" as defined by FICA law

Question 32

TRUE/FALSE? Exempt employees are entitled to overtime pay

Answer 32

FALSE

Question 33

In what situation would "wage theft" be acceptable?

Answer 33

It is never acceptable.

Question 34

Are a W2 employee and a 1099 employee the same thing?

Answer 34

No

Question 35

What does EIN stand for?

Answer 35

Employer Identification Number

Question 36

TRUE/FALSE? The law requires overtime pay to be 1.5 times the employees regular hourly rate of pay

Answer 36

TRUE

Question 37

How much can an employee credit for a "tipped employee"?

Answer 37

$5.12

Question 38

If a non-exempt employee takes his/her work home. Must the employee be paid for this extra time?

Answer 38

Yes, the non-exempt employee would still be paid for those outside hours. This still applies even if the employee is expressly told not to.

Question 39

What percentage of minimum wage can a retail establishment pay to an employee that is a full-time student?

Answer 39

85%

Question 40

What percentage are employees taxed for their FICA tax rates?

Answer 40

6.2% and 1.45%

Question 41

What are the self-employed FICA tax rates?

Answer 41

12.4% and 2.9% (double the employee FICA tax rates)

Question 42

TRUE/FALSE? An employer's matching contributions into an employee's deferred compensation agreement (such as 401K) is taxable for FICA

Answer 42

FALSE

Question 43

What is Form 941? And how often is it filed?

Answer 43

Federal Tax Return showing total taxes (for both employer and employee) including FICA wages paid, FICA taxes, and income tax. Must be filed quarterly to avoid penalties.

Question 44

What is Form 944? And how often is it filed?

Answer 44

Federal Tax return (for both employer and employee) showing only income tax. Must be filed annually.

Question 45

After what point is sick pay no longer considered wages for FICA tax purposes?

Answer 45

6 calendar months