Appendix C - APPENDIXC PayrollAccounting...

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APPENDIX C Payroll Accounting ASSIGNMENT CLASSIFICATION TABLE Study Objectives Questions Brief Exercises Exercises Problems Alternate Problems 1. Discuss the objectives of internal control for payroll. 1, 2 1 1 1 2. Compute and record the payroll for a pay period. 3, 4, 5, 7, 8, 9, 10 2, 3 1, 2, 3, 4 2, 3, 4 2, 3, 4 3. Describe and record employer payroll taxes. 4, 5, 6, 10 4 3, 5 2, 3, 4 2, 3, 4 Appendix C-1
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ASSIGNMENT CHARACTERISTICS TABLE Problem Number Description Difficulty Level Time Allotted (min.) C-1 Identify internal control weaknesses and make recom- mendations for improvement. Simple 20-30 C-2 Prepare payroll register and payroll entries. Simple 30-40 C-3 Journalize payroll transactions and adjusting entries. Moderate 30-40 C-4 Prepare entries for payroll and payroll taxes, and prepare W-2 data. Moderate 30-40 C-1A Identify internal control weaknesses and make recom- mendations for improvement. Simple 20-30 C-2A Prepare payroll register and payroll entries. Simple 30-40 C-3A Journalize payroll transactions and adjusting entries. Moderate 30-40 C-4A Prepare entries for payroll and payroll taxes, and prepare W-2 data. Moderate 30-40
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ANSWERS TO QUESTIONS 0 1. The main internal control objectives associated with payrolls are: (1) to safeguard company assets from unauthorized payments of payrolls and (2) to assure the accuracy and reliability of the accounting records pertaining to payrolls. 0 2. The four functions associated with payroll are: (1) hiring employees, (2) timekeeping, (3) preparing the payroll, and (4) paying the payroll. 0 3. Gross pay is the amount an employee actually earns. Net pay, the amount an employee is paid, is gross pay reduced by both mandatory and voluntary deductions, such as FICA taxes, union dues, federal income taxes, etc. Gross pay should be recorded as wages or salaries expense. 0 4. Both employees and employers are required to pay FICA taxes. 0 5. No. When an employer withholds federal or state incomes taxes from employee paychecks, the employer is merely acting as a collection agent for the taxing body. Since the employer holds employees' funds, these withholdings are a liability for the employer until they are remitted to the government. 0 6. FICA stands for Federal Insurance Contribution Act; FUTA stands for Federal Unemployment Tax Act; and SUTA stands for State Unemployment Tax Act. 0 7. A W-4 statement shows the employee's name, address, social security number, marital status, and the number of allowances claimed for income tax withholding purposes. A W-2 statement contains the employee's name, address, social security number, wages, tips, other compensation, social security taxes withheld, wages subject to social security taxes, and federal, state and local income taxes withheld. 0 8.
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This note was uploaded on 04/04/2009 for the course ACC 321 taught by Professor Ahmedmokhtar during the Spring '09 term at Ain Shams University.

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Appendix C - APPENDIXC PayrollAccounting...

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