CPM Payroll Accounting and Reporting 2

Question 1

Which account is credited when recording an employee's gross wages as a payroll expense?

Accepted Answer

Salaries Payable

Answer

When accruing payroll, Salaries Expense is debited and Salaries Payable (a liability) is credited until payment is made.

Question 2

On a payroll journal entry, which of the following represents the employer's share of FICA taxes?

Accepted Answer

A debit to Payroll Tax Expense and credit to FICA Taxes Payable

Answer

The employer's share of FICA is recorded as Payroll Tax Expense (debit) and FICA Taxes Payable (credit), separate from employee withholdings.

Question 3

What is the purpose of a payroll subsidiary ledger?

Accepted Answer

To maintain detailed individual employee earnings records that support the general ledger payroll accounts

Answer

A payroll subsidiary ledger contains individual employee earning histories that provide the detail behind the summarized general ledger balances.

Question 4

An employer pays wages of $10,000 and withholds $765 in employee FICA and $1,500 in federal income tax. What is the correct credit to Cash when the net payroll is disbursed?

Accepted Answer

$7,735

Answer

$10,000 gross minus $765 FICA minus $1,500 FIT withholding equals $7,735 net pay disbursed in cash.

Question 5

Which payroll report is used to reconcile total wages paid to employees against amounts reported to the IRS on Form 941?

Accepted Answer

Payroll Register

Answer

The payroll register is an internal report summarizing each pay period's payroll data that employers use to reconcile totals to Form 941 filings.

(CPM) Certified Payroll Manager Practice Test

(CPM) Certified Payroll Manager Practice Test

CPM Payroll Accounting and Reporting 2