1. What is NOT an example of internal control procedures that help prevent payroll fraud?

a.Outsource Payroll Administration

b.Require mandatory vacations

c.Make sure only one person handles payroll functions

d.Conduct periodic unannounced audits

2.

Which of the following forms is an annual report filed by employers showing total wages paid to employees, total wages subject to federal unemployment tax, total federal unemployment tax, and other information?

a.Form W-3

b.Form 940

c.Form 941-V

d.Form 876

3. The entry to record the employer's payroll taxes includes a

a.credit to Employees' Federal Income Tax Payable.

b.debit to Federal Unemployment Tax Payable.

c.debit to FICA Tax Expense.

d.debit to Salaries Payable.

e.credit to FICA Tax Payable.

4. Which of the following payroll taxes has a maximum of earnings subject to the tax?

a.State unemployment tax

b.FICA Medicare

c.FICA Social Security

d.All of these choices are correct.

e.Both state unemployment tax and FICA Social Security

5.Lee Loren has cumulative earnings of $6,750 and earned $745 during the current pay period. If the FUTA tax rate is 0.6 percent, with a ceiling of $7,000, the employer payroll tax expense for FUTA is

a.$5.96.

b.$15.00.

c.$0.

d.$1.50.

e.$54.00.

6. Which of the following statements is true?

a.Withholding Federal Income Taxes is optional for the employer

b.Payroll Tax Expense involves Federal Income Tax Withholding.

c.The FUTA wage taxable limit is $7,000

d.SUTA and FUTA Tax Rates are always the same

7. Wages Payable is used to record:

a.Deductions and Taxes

b.Employee Gross Pay

c.Cumulative Employee Earnings

d.Employee Net Pay

8.Tom James has cumulative earnings of $6,825 and earned $750 during the current payroll period. The FUTA tax is 0.6%, with a ceiling of $7,000. What is the employers federal unemployment tax liability for the current payroll:

a.$1.05

b.$105.00

c.$10.50

d.$175.00

9. To which of the following payroll taxes are employers required to contribute a matching portion for each employee?

a.Workers' Compensation

b.Social Security & Medicare

c.State unemployment

d.Federal unemployment

e.All of these choices are correct.

10.The employer becomes liable for payroll tax expense when the employees are actually paid.

True

False

11. Extra hours that are added to wage information in order to increase pay is an example of:

a.Ghost Employee Fraud

b.False Wage Claim Fraud

c.False Expense Reimbursement Fraud

d.None of these choices are correct.

12.The 940 Report is prepared and remitted:

a.Monthly

b.Quarterly

c.Annually

d.As soon as wages reach $7,000

13.The rate of the state unemployment tax varies considerably among states.

True

False

14. The number assigned to employers by the IRS for use in submitting and reporting tax payments is:

a.FUTA

b.EIN

c.iPay

d.TIPN

15.The details of the current week's earnings for each employee are reported on each employee's W-4 form.

True

False

16.Most employers are required to withhold federal unemployment taxes from employees' earnings.

True

False

17. Which of the following is debited in the journal entry to record the payment of the taxes shown on the quarterly 941 tax form?

a.FICA Social Security Tax Payable, FICA Medicare Tax Payable, and Employee's Federal Income Tax Payable

b.Only Cash

c.SUTA Tax Receivable (only employee), FICA Medicare Tax Payable, and Federal Income Tax Payable

d.Only Federal Income Tax Payable

e.Federal Unemployment Tax (FUTA) Payable (only employee) and Federal Income Tax Payable

18. The source of information to complete the W-2 form is the employee's individual earnings record.

True

False

19. Payroll Tax Expense includes all of the following EXCEPT:

a.Federal Income Tax Withheld

b.FUTA

c.SUTA

d.FICA Taxes Payable

20. Form 941 must be submitted quarterly.

True

False