Fundamental Payroll Certification Fundamental Payroll Payroll Accounting Principles 2

Question 1

When recording the employer's share of FICA taxes, which account is debited?

Accepted Answer

Payroll Tax Expense

Answer

The employer's share of FICA taxes is recorded as a debit to Payroll Tax Expense and a credit to FICA Taxes Payable.

Question 2

A payroll accrual entry is typically necessary when:

Accepted Answer

The pay period ends before the accounting period closes

Answer

An accrual is needed when a pay period straddles two accounting periods so that wages earned but unpaid are recognized in the correct period.

Question 3

Which of the following is classified as a current liability on the balance sheet?

Accepted Answer

Accrued wages payable

Answer

Accrued wages payable are obligations expected to be paid within 12 months and are therefore current liabilities.

Question 4

When an employee's garnishment payment is remitted to the creditor, the journal entry includes a:

Accepted Answer

Debit to Garnishments Payable and credit to Cash

Answer

Remitting a garnishment reduces the liability (Garnishments Payable) and reduces the asset Cash.

Question 5

Which payroll register column is used to verify the accuracy of the general ledger payroll entry?

Accepted Answer

Total gross wages column

Answer

The total gross wages column in the payroll register should agree with the Wages Expense debit in the general ledger journal entry.

Fundamental Payroll Certification Practice Test