AFE Quiz 23: Payroll Accounting USA – Accounting for Everyone

What does payroll accounting primarily involve?

Recording and managing employee compensation, taxes, and deductions
Recording sales transactions
Managing inventory purchases
Reconciling bank statements

Which of the following is typically withheld from an employee’s paycheck?

Federal income tax
Social Security tax
Medicare tax
All of the above

Which account is debited when recording gross wages for employees?

Wages Expense
Cash
Payroll Tax Payable
Accounts Receivable

What is the employer’s responsibility regarding payroll taxes?

Withhold and remit employee taxes, and pay employer taxes
Only withhold employee taxes
Only pay employer taxes
No responsibility

Which of the following is an employer payroll tax?

Federal unemployment tax (FUTA)
State unemployment tax (SUTA)
Social Security tax (employer portion)
All of the above

Which form is given to employees at year-end showing their total wages and tax withholdings?

W-2
1099-MISC
941
1040

What is net pay?

Gross pay minus all deductions
Gross pay plus employer taxes
Total payroll tax expense
Total gross pay for all employees

Which of the following would NOT be considered a payroll deduction?

Health insurance premiums
Retirement plan contributions
Utilities expense
Federal income tax

When an employer remits payroll taxes to the government, which account is credited?

Cash
Payroll Tax Expense
Wages Expense
Accounts Receivable

Which of the following is true about payroll accounting?

It tracks only gross wages
It includes both employee and employer payroll taxes
It is not required by law
It excludes deductions and withholdings