College Accounting (Book Only): A Career Approach
12th Edition
ISBN: 9781305084087
Author: Cathy J. Scott
Publisher: Cengage Learning
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Chapter 7, Problem 3A
To determine
State and explain whether the action is ethical, unethical or illegal.
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In order to improve the cash flow of the company, Neal Emerald decided to postpone depositing all employment taxes a few months ago. He told his sales manager, “I’ll pay up before the IRS catches up with me.” What risks does Emerald face by not upholding his responsibility for the collection and payment of employment taxes?
If an employer does not deduct taxes and contribution from an employee. The employee has the ultimate responsibility to pay the taxes to the Revenue and the Revenue will penalize the employee.
true or false
A cash basis taxpayer can defer income by not depositing a year-end bonus.
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Chapter 7 Solutions
College Accounting (Book Only): A Career Approach
Ch. 7 - Prob. 1QYCh. 7 - Which of the following taxes are not withheld from...Ch. 7 - Calculate an employees total earnings if the...Ch. 7 - Prob. 4QYCh. 7 - Prob. 5QYCh. 7 - Prob. 6QYCh. 7 - When is the payroll register updated? a. Annually...Ch. 7 - Prob. 1DQCh. 7 - Prob. 2DQCh. 7 - Prob. 3DQ
Ch. 7 - Explain the difference between gross earnings and...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 1ECh. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - On January 21, the column totals of the payroll...Ch. 7 - Precision Labs has two employees. The following...Ch. 7 - Prob. 8ECh. 7 - Prob. 1PACh. 7 - Prob. 2PACh. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - Prob. 5PACh. 7 - Prob. 1PBCh. 7 - Prob. 2PBCh. 7 - Prob. 3PBCh. 7 - Prob. 4PBCh. 7 - Prob. 5PBCh. 7 - Attracting and retaining the best employees is...Ch. 7 - Southern Company pays its employees weekly by...Ch. 7 - Prob. 3A
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- Identify the following statement that is false. a. If an employer is not required to withhold income taxes from an employee’s wages, the wages are not taxable to the employee. b. In certain situations, income tax withholding by an employer is voluntary. c. An employer must deposit with the government an amount of FICA tax that is twice the amount withheld from the employee’s salary (i.e., the employee’s and employer’s shares). d. If an excess amount of FICA is withheld for an employee because the employee has multiple jobs, the employee may claim a credit for the excess amount withheld on his or her income tax return.arrow_forwardWhich of the following statements is false regarding an employee's contribution into a 401(k) tax deferred retirement account? a.The employee's contributions are not subject to FICA tax. b.Upon retirement, payments are then subject to federal income tax. c.Upon retirement, the employee will receive their contributions back in the form of regular payments. d.The employee may be in a lower tax bracket when the retirement income is taxed. e.None of these statements are correct.arrow_forwardLeebei placed his savings from his salary in time deposit with VileBank. VileBank regularly deducts final withholding tax on the interest gains of Leebei's time deposit. Sick of deductions on his money, Leebei contested the propriety of the final withholding tax because his salaries had already been subjected to withholding tax before he even received them. Unfazed by Leebei's protestation of the continuing injustice, VileBank continues to deduct final withholding tax on Leebei's time deposit to the latter's torment. Who is correct? Explainarrow_forward
- Lump sum payments in respect of the termination of employment of a person may be relieved from tax. What are the conditions that must be met for these payments to be made without the deduction of tax.arrow_forwardIn Jamaica Lump sum payments in respect of the termination of employment of a person may be relieved from tax. Discuss the conditions that must be met for these payments to be made without the deduction of tax.arrow_forwardtrue or false In most situations, the total Social Security taxes levied on employers will exceed the amount of Social Security taxes withheld from employees.arrow_forward
- As You Read QUESTION What could happen if your employer did not deduct federal income taxes from your paychecks?arrow_forwardA landlord who receives prepaid rent is required to report that amount as gross income when the payment is received. Why would Congress choose to do this? What problem does this create for the taxpayer? C O A. Congress taxes prepaid rental income due to the concern that taxpayers who spend the money will be unable to pay the tax when t comes due. The problem created for taxpayers is that they are taxed before they incur related expenses, such as repairs, insurance, and depreciation. Therefore, there is a mismatching of revenue and expense. O B. O C. Congress taxes prepaid rental income to collect more taxes from a taxpayer by increasing their tax bracket with the additional income. The problem this causes for the taxpayer is inconsistent taxable income from year to year and increases the risk of an audit. O D. Congress taxes prepaid rental income due to numerous landlords not reporting this income in the following tax year. The problem created for taxpayers is that they are taxed…arrow_forwards this statement true about underpayment penalties? The taxpayer will never received an underpayment penalty so long as their taxes are paid before the original due datearrow_forward
- Which of the following statements is false? Select one: O A. In general, individual taxpayers are required to file a tax return only if their gross income exceeds the standard deduction OB. The penalty for failure to file is more severe than the penalty for failure to pay OC. Taxpayers may file a tax return even when they are not required to do so to obtain a refund of income taxes withheld OD. Individual tax returns are always due on April 15 for calendar-year individualsarrow_forwardIncome taxes are withheld from the employee's paycheck. True Falsearrow_forward16. Is this statement true about underpayment penalties. A. The taxpayer will never receive an underpayment penalty as long as their taxes are paid before their original due date. B. If this is for the first time you have received this penalty you may request a penalty abatement with the IRS. C. Penalties are assessed when the tax is underpaid by more than 50%.arrow_forward
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