13.06 - Review for Ch 13 Payroll Taxes Quiz

Create and submit a Google Doc that addresses the following problems 

• Submit your work through the Assignment Submission Form

True or False:

1. Cash in Bank is credited for the total amount earned by the employees’ each pay period.
2. The salary expense of a business is equal to the total gross earnings.
3. When payroll is recorded for the pay period, the credit to cash is equal to the take home pay amount.
4. Both federal and state unemployment taxes are recorded in the same Unemployment Taxes Payable account.
5. The employer’s payroll taxes are operating expenses of the business.
6. Employers must pay FICA taxes and unemployment taxes.
7. Employees’ wages calculated during the pay period are liabilities to the business.

Using the following account titles, journalize the transactions below (Gross Earnings = $100,000).

• salaries expense
• employee’s federal income tax payable
• employees’ state income tax payable
• social security tax payable
• Medicare tax payable
• U.S. savings bond payable
• insurance premiums payable
• cash in bank
• payroll tax expense
• federal unemployment tax payable
• state unemployment tax payable

1. Record the employer’s payroll taxes.
2. Record the payment of the employer’s federal unemployment taxes.
3. Record the payment of the employee’s state income taxes.
4. Record the payment of FICA taxes and employee’s federal income taxes.
5. Record the payment of the employer’s state unemployment taxes.
6. Record the payment of life insurance premiums previously withheld from the employees’ earnings
7. Record the purchase of savings bonds for the employees.

Answer each of the following statements by choosing Debit or Credit

1. Normal balance side of the salaries expense account.
2. Normal balance side of the payroll tax expense account.
3. Normal balance side of the federal income tax payable account.
4. Normal balance side of the federal unemployment tax payable account.
5. Normal balance side of the social security tax payable account.
6. Normal balance side of the Medicare tax payable account.
7. The total amount of net pay of all employees is entered on the _________ side of the cash in bank account.
8. An increase in the state unemployment tax payable account is recorded as a __________.
9. When a payment is made to the federal government for the employees’ federal income tax, an entry is made on the ________ side of the Employees’ Federal Income Tax Payable account.
10. The total amount of gross earnings is entered on the ________ side of the Salaries Expense account.