12 – Preparing Payroll Records


Understanding the Accounting Cycle for a Service Business

  • 51: Describe record-organization and retention-schedule procedures for a service business.
  • 52: Identify special transactions that require tax review.
  • 82:  Describe methods used to determine gross earnings (e.g., piece-rate, hourly, salary, commission, overtime, bonuses).
  • 83:  Explain the purposes of withholding and other deductions.
  • 84:  Compute employee gross earnings, deductions, and net pay on a payroll register.
  • 86:  Maintain employee earnings records
  • 87:  Generate payroll checks.
  • 88:  Identify source documents required for adding and deleting employees from payroll.
  • 90:  Prepare employer tax returns.

Learning Objectives

After studying Chapter 12, in addition to defining key terms, you will be able to:

  • LO1 Explain how employees are paid.
  • LO2 Calculate hourly employee earnings.
  • LO3 Demonstrate the process for determining federal income tax withholdings.
  • LO4 Demonstrate the process for calculating social security and Medicare taxes.
  • LO5 Explain the benefit of funding medical and retirement plans with pretax contributions.
  • LO6 Prepare a payroll register.
  • LO7 Prepare employee earnings records.
  • LO8 Justify the use of a payroll checking account.
  • LO9 Prepare employee payroll checks.

Chapter 12 Vocabulary

Chapter 12 Accounting Text

Chapter 12Coversheet

Chapter 12 Mastery and Challenge problems, 12 source

Chapter 12 Study Guide

Section 1:

Section 2:

Section 3:

Section 4: