6) Art Parrish, the sole employee of Parrish Sales, has gross salary for March of $4,000. The entire amount is under the OASDI limit of $106,800 and thus subject to FICA. He is also subject to federal income tax at a rate of 18%. His year-to-date pay has already exceeded the $7,000 cap for FUTA and SUTA. The fifth journal entry in the payroll cycle to record the payment by the company of payroll taxes to the government includes a debit to FICA payable of $612.
7) Parrish Sales withholds $720 from Art Parrish's paycheck for federal income tax. This amount is part of the company's payroll tax expense.
8) Art Parrish, the sole employee of Parrish Sales, has gross salary for March of $4,000. The entire amount is under the OASDI limit of $106,800 and thus subject to FICA. The total amount of FICA that the company pays to the government on Art Parrish's behalf is $612.
9) Art Parrish, the sole employee of Parrish Sales, has gross salary for March of $4,000. The entire amount is under the OASDI limit of $106,800 and thus subject to FICA. The total amount of FICA that will be recorded as company expense totals $612.
10) Ensuring efficiency of the payroll process is one of the two key controls for payroll.
11) Internal controls over payroll focus on operational efficiency and safeguarding of payroll disbursements.
12) Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2012, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 7.65%. Which of the following would be included in the entry to record the salary expense for January?
A) A debit to Salary payable to employees for $734.40
B) A debit to FICA tax payable for $734.40
C) A credit to FICA tax payable for $734.40
D) A credit to Salary expense for $734.40
13) Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2012, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 8%. Which of the following would be included in the entry to record the payroll tax expense to be paid out by Lone Star Company for January?
A) A debit to FICA tax payable for $734.40
B) A credit to FICA tax payable for $734.40
C) A credit to Salary expense for $734.40
D) A debit to Salary payable to employees $734.40
14) The Statewide Sales Company has gross pay for March of $45,000. Which of the following is the first journal entry in the payroll cycle to record salary expense?
A)
Salary expense
|
45,000
|
|
Salary payable
|
|
45,000
|
B)
Salary payable
|
45,000
|
|
Salary expense
|
|
45,000
|
C)
Salary expense
|
45,000
|
|
Cash
|
|
45,000
|
D)
Cash
|
45,000
|
|
Salary expense
|
|
45,000
|
15) The Statewide Sales Company has gross pay for March of $45,000. Which of the following would be included in the first journal entry in the payroll cycle to record salary expense?
A) Credit Salary expense
B) Debit Cash
C) Debit Salary payable
D) Debit Salary expense