Accounting Ch 12 Review

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

Total earnings are sometimes referred to as net pay.

• True

• False

The amount of an income tax withheld from each employee's total earnings is determined solely from the number of withholdings allowances.

• True

• False

The investment income in a Roth IRA is not subject to federal income taxes when withdrawn.

• True

• False

Social Security tax is paid by both the employee and employer.

• True

• False

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

• True

• False

All deductions from employees' wages are recorded in a payroll register.

• True

• False

Employee total earnings are calculated as regular hours x regular rate, plus overtime hours x overtime rate.

• True

• False

Payroll taxes are based on employee total earnings.

• True

• False