Ch 8 Tf Mc Comp Answers 2

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 employee's 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