Chapter8—PayrollAccountingEmployeeEarningsand.docVIP

Chapter 8—Payroll Accounting: Employee Earnings and Deductions TRUE/FALSE 1. Payroll expenditures represents a relatively small part of the total expenditures of most companies. ANS: F DIF: Easy OBJ: LO 8-1 MSC: AACSB Communication 2. The Fair Labor Standards Act provides that all employees covered by the act must be paid one and one-half times the regular rate for all hours worked over 40 per week. ANS: T DIF: Easy OBJ: LO 8-2 MSC: AACSB Communication 4. Compensation expressed in terms of hours, weeks, or units produced for skilled or unskilled labor is usually referred to as salary. ANS: F DIF: Easy OBJ: LO 8-2 MSC: AACSB Communication 5. Companies must accumulate payroll data both for the business as a whole and for each employee. ANS: T DIF: Easy OBJ: LO 8-1 MSC: AACSB Communication 6. Compensation for managerial or administrative services usually is expressed in biweekly, monthly, or annual terms and is called wages. ANS: F DIF: Easy OBJ: LO 8-2 MSC: AACSB Communication 7. Every individual who performs services for a business is considered to be an employee. ANS: F DIF: Easy OBJ: LO 8-1 MSC: AACSB Communication 9. The length of the pay period affects the amount to be withheld from an employees gross pay each pay period. ANS: T DIF: Easy OBJ: LO 8-2 MSC: AACSB Communication 10. Government laws and regulations regarding payroll are much more complex for employees than for independent contractors. ANS: T DIF: Easy OBJ: LO 8-1 MSC: AACSB Communication 12. The difference between an independent contractor and an employee is an important legal distinction. ANS: T DIF: Easy OBJ: LO 8-1 MSC: AACSB Communication 13. An independent contractor performs a service for a fee and does not work under the control and direction of the company paying for the service. ANS: T DIF: Easy OBJ: LO 8-1 MSC: AACSB Communication 14. The payroll register is a summary of the annual earnings of each employee. ANS: F DIF: Easy OBJ: LO 8-3 MSC: AACSB Communication 16. The Medicar