Accounting - Chapter 12

Businesses use payroll records to inform employees of their annual earnings and to prepare payroll reports for the government.

• True
• False

Qualified retirement plans are approved by an act of Congress.

• True
• False

The first task in preparing a payroll is to determine the number of days worked by each employee.

• True
• False

Total earnings are sometimes referred to as net pay.

• True
• False

Payroll taxes withheld represent a liability for an employer until payment is made.

• True
• False

When an employee’s earnings exceed the tax base, no more social security tax is deducted.

• True
• False

The amount of income tax withheld from each employee’s total earnings is determined solely from the number of withholding allowances.

• True
• False

The investment income in a Roth IRA is not subject to federal income taxes when withdrawn.

• True
• False

A business is required by law to withhold certain payroll taxes from employee salaries.

• True
• False

A single person will have more income tax withheld than a married employee.

• True
• False