Fundamental Payroll Certification Fundamental Payroll Payroll Accounting Principles 5

Question 1

Which of the following is considered an employer payroll tax expense but NOT an employee withholding?

Accepted Answer

Federal Unemployment Tax (FUTA)

Answer

FUTA is paid solely by the employer and is never withheld from employee wages.

Question 2

A fringe benefit provided to an employee has a fair market value of $200. How does this affect payroll accounting?

Accepted Answer

It is added to gross wages for tax purposes and recorded as wages expense

Answer

Taxable fringe benefits must be included in the employee's gross wages, which increases both wages expense and the related tax withholding obligations.

Question 3

What is the primary purpose of a payroll subsidiary ledger?

Accepted Answer

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

Answer

The payroll subsidiary ledger contains detailed individual employee records whose totals must agree with the payroll-related general ledger control accounts.

Question 4

When comparing payroll to the prior period for analytical review, which variance is most likely a legitimate business change rather than an error?

Accepted Answer

A 15% increase in wages expense following a company-wide merit raise

Answer

A merit raise affecting all employees is a documented business event that would proportionally increase wages expense, making it a plausible variance.

Question 5

Which document is most useful for reconciling the total wages reported on Form 941 to the general ledger?

Accepted Answer

The payroll register summary for each quarter

Answer

The quarterly payroll register summary provides the gross wage totals by quarter that should match the taxable wages reported on Form 941.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Payroll Accounting Principles 5