Multiple Choice Answers

Employees’ payments for federal income taxes withheld and social security and Medicare taxes are periodically:
A. sent directly to the Internal Revenue Service.
B. deposited in a special-purpose bank account, controlled by the company, until year-end when the funds are sent to the U.S. Treasury Department.
C. sent to the local office of the Internal Revenue Service.
D. deposited in a government-authorized financial institution.
Both the employer and the employee are responsible for paying:
A. social security and Medicare taxes.
B. Federal unemployment taxes.
C. social security, Medicare, and Federal unemployment taxes.
D. SUTA taxes.
Taxes are levied only on the employer for:
A. social security and Medicare taxes.
B. Federal unemployment taxes.
C. social security, Medicare, and Federal unemployment taxes.
D. all taxes.
On Form 941, the Employer’s Quarterly Federal Tax Return, a firm calculates its liability for the quarter for:
A. federal income taxes withheld, social security and Medicare taxes, and Federal unemployment taxes.
B. federal income taxes withheld and social security and Medicare taxes.
C. social security and Medicare taxes and Federal unemployment taxes.
D. federal and state income taxes withheld.
Each employee of a firm will receive several copies of Form W-2, the Wage and Tax Statement, from the:
A. employer with each paycheck.
B. employer once a year.
C. federal government once a year.
D. employer once a quarter.
Which of the following usually does NOT represent a withholding deduction from an employee’s pay?
A. Federal income tax
B. State unemployment tax
C. Medicare tax
D. Social security tax
All of the following are internal control procedures that are recommended to protect payroll operations EXCEPT:
A. assign new employees to work in payroll operations.
B. keep payroll records in locked files.
C. make voluntary deductions from employee earnings based only on a signed authorization from the employee.
D. retain all Forms W-4.

To record the payment of State unemployment tax, the accountant would debit __________ and credit __________.
A. Payroll Taxes Expense; State Unemployment Tax Payable
B. Payroll Taxes Expense; Cash
C. Social Security Taxes Payable; Cash
D. State Unemployment Tax Payable; Cash
A copy of the Form W-2 for each employee is submitted to the Social Security Administration along with:
A. Form 940.
B. Form 941.
C. Form 8109.
D. Form W-3.