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K1 Payroll
5 ACCA New at Knowledge level questions with answers and explanations.
Printable worksheet with answer key
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Gross pay is $400,000, employee social security $30,000 and employee income tax $50,000. What is the net pay?
- 1 $480,000
- 2 $320,000
- 3 $350,000
- 4 $400,000
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Correct answer: $320,000
Net pay = gross pay less the employee's deductions.
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Gross pay is $400,000 and the employer's social security contribution is $40,000. What is the staff cost in profit or loss?
- 1 $360,000
- 2 $400,000
- 3 $320,000
- 4 $440,000
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Correct answer: $440,000
Staff cost is gross pay plus the employer's contribution. The employee's deductions are already inside gross pay.
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Gross pay is $400,000, employee income tax $50,000, employee social security $30,000 and employer social security $40,000, how much is owed to the authorities?
- 1 $120,000
- 2 $40,000
- 3 $50,000
- 4 $80,000
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Correct answer: $120,000
The tax, the employee's contributions and the employer's contributions are all owed: 50,000 + 30,000 + 40,000.
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In the payroll journal, which account is credited with the income tax deducted from employees?
- 1 Tax payable (liability)
- 2 Revenue
- 3 Payroll expense
- 4 Bank
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Correct answer: Tax payable (liability)
The tax withheld is a liability to the tax authority until it is paid.
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Which payroll amount is an additional cost to the employer on top of gross pay?
- 1 The net pay
- 2 The employee's income tax
- 3 The employer's social security contribution
- 4 The employee's social security contribution
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Correct answer: The employer's social security contribution
Only the employer's contribution adds to the cost of employing someone.