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Federal Income Tax I TEST FINAL EXAM AND PRACTICE
EXAM 2026-2027 BANK 2 VERSIONS QUESTIONS WITH
DETAILED VERIFIED ANSWERS EXAM QUESTIONS WILL
COME FROM HERE (100% CORRECT ANSWERS A+ GRADED
14. At the time that the entry is made to record the employers payroll
taxes, the SUTA tax is recorded at the net amount (0.6%).
A) True
B) False - ANSWERS--B) False
15. The adjusting entry to record the accrued vacation pay at the end of
an accounting period includes credits to the tax withholding liability
accounts.
A) True
B) False - ANSWERS--B) False
30. When recording the deposit of FUTA taxes owed, the proper entry
is:
A) FUTA Tax Expense- Cash
B) Payroll Taxes- Cash
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C) Payroll Taxes- FUTA Taxes Payable
D) FUTA Taxes Payable- Cash
E) FUTA Tax Expense- FUTA Taxes Payable - ANSWERS--D) FUTA Taxes
Payable- Cash
1. An employer will use the payroll register to keep track of an
employee's accumulated wages.
A) True
B) False - ANSWERS--B) False
2. Once the journal entry for the payroll is complete, the information is
posted to the appropriate general ledger accounts.
A) True
B) False - ANSWERS--A) True
3. A debit to the employees' FIT payable account removes the liability
for the amount of federal income taxes withheld from employees'
wages.
A) True
B) False - ANSWERS--A) True
4. Amounts withheld from employees' wages for health insurance are
credited to a liability account.
A) True
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B) False - ANSWERS--A) True
5. Tips received by employees are included as disposable earnings
subject to garnishment for child support.
A) True
B) False - ANSWERS--A) True
6. FUTA Taxes Payable is an expense account in which are recorded the
employer's federal unemployment taxes.
A) True
B) False - ANSWERS--B) False
7. The FICA taxes on the employer represent both business expenses
and liabilities of the employer.
A) True
B) False - ANSWERS--A) True
8. Since FUTA tax is paid only once a quarter, the FUTA tax expense is
recorded only at the time of payment.
A) True
B) False - ANSWERS--B) False
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9. If employees must contribute to the state unemployment fund, this
deduction should be shown in the payroll tax entry.
A) True
B) False - ANSWERS--B) False
10. Since vacation time is paid when used, there is no need to accrue
this time in a liability account at the end of each accounting period.
A) True
B) False - ANSWERS--B) False
11. Carmen Gaetano worked 46 hours during this pay week. He is paid
time-and-a-half for hours over 40 and his pay rate is $17.90/hour. What
was his overtime premium pay for this workweek?
A) $107.40
B) $161.10
C) $50.70
D) 53.70
E) 26.85 - ANSWERS--D) 53.70
12. The employee's earnings record provides information for each of
the following except:
A) completing forms W-2.
B) completing the journal entry to record the payroll.
Federal Income Tax I TEST FINAL EXAM AND PRACTICE
EXAM 2026-2027 BANK 2 VERSIONS QUESTIONS WITH
DETAILED VERIFIED ANSWERS EXAM QUESTIONS WILL
COME FROM HERE (100% CORRECT ANSWERS A+ GRADED
14. At the time that the entry is made to record the employers payroll
taxes, the SUTA tax is recorded at the net amount (0.6%).
A) True
B) False - ANSWERS--B) False
15. The adjusting entry to record the accrued vacation pay at the end of
an accounting period includes credits to the tax withholding liability
accounts.
A) True
B) False - ANSWERS--B) False
30. When recording the deposit of FUTA taxes owed, the proper entry
is:
A) FUTA Tax Expense- Cash
B) Payroll Taxes- Cash
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C) Payroll Taxes- FUTA Taxes Payable
D) FUTA Taxes Payable- Cash
E) FUTA Tax Expense- FUTA Taxes Payable - ANSWERS--D) FUTA Taxes
Payable- Cash
1. An employer will use the payroll register to keep track of an
employee's accumulated wages.
A) True
B) False - ANSWERS--B) False
2. Once the journal entry for the payroll is complete, the information is
posted to the appropriate general ledger accounts.
A) True
B) False - ANSWERS--A) True
3. A debit to the employees' FIT payable account removes the liability
for the amount of federal income taxes withheld from employees'
wages.
A) True
B) False - ANSWERS--A) True
4. Amounts withheld from employees' wages for health insurance are
credited to a liability account.
A) True
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B) False - ANSWERS--A) True
5. Tips received by employees are included as disposable earnings
subject to garnishment for child support.
A) True
B) False - ANSWERS--A) True
6. FUTA Taxes Payable is an expense account in which are recorded the
employer's federal unemployment taxes.
A) True
B) False - ANSWERS--B) False
7. The FICA taxes on the employer represent both business expenses
and liabilities of the employer.
A) True
B) False - ANSWERS--A) True
8. Since FUTA tax is paid only once a quarter, the FUTA tax expense is
recorded only at the time of payment.
A) True
B) False - ANSWERS--B) False
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9. If employees must contribute to the state unemployment fund, this
deduction should be shown in the payroll tax entry.
A) True
B) False - ANSWERS--B) False
10. Since vacation time is paid when used, there is no need to accrue
this time in a liability account at the end of each accounting period.
A) True
B) False - ANSWERS--B) False
11. Carmen Gaetano worked 46 hours during this pay week. He is paid
time-and-a-half for hours over 40 and his pay rate is $17.90/hour. What
was his overtime premium pay for this workweek?
A) $107.40
B) $161.10
C) $50.70
D) 53.70
E) 26.85 - ANSWERS--D) 53.70
12. The employee's earnings record provides information for each of
the following except:
A) completing forms W-2.
B) completing the journal entry to record the payroll.
