For her 10 years of service, an employee was given a gold necklace valued at $100.
Which of the following is true?
- A . the gift must be included in her taxable compensation
- B . the gift is tax free
- C . only social security and medicare tax should be withheld on the fair market value of the award
- D . only federal income tax should be withheld on the fair market value of the award
hat type of pay is included in the regular rate of pay calculation?
- A . discretionary bonuses
- B . paid sick leave
- C . paid vacation leave
- D . production bonuses
What does an employer use to calculate the amount to withhold for an IRS tax levy?
- A . disposable pay
- B . net pay
- C . take home pay
- D . taxable wages
Payroll documentation accomplishes all of the following goals EXCEPT:
- A . ensuring uniformity
- B . providing a reference tool
- C . ensuring that procedures are followed
- D . simplifying training
When an employee lives and works in the same state, the employer withholds income tax for that state.
- A . TRUE
- B . False
All of the following statements about FLSA overtime regulations are true EXCEPT:
- A . a bonus paid under a union contract is included in the regular rate of pay
- B . a holiday bonus, paid at the discretion of the employer is excluded from the regular rate of pay
- C . the weeks regular rate of pay must include shift premiums
- D . employers must pay overtime when employees work more than 8 hours in a workday.
A retired safety inspector for the company was rehired as a consultant when the company expanded its plant operations. the retired employee was a natural choice. the tasks he undertook as a consultant were the same as the ones he performed before retirement. paid monthly, he has agreed to work under the direction of his old boss until the new plantfacilitates are fully operational?
What is his status?
- A . independent contractor under common law
- B . independent contractor under reasonable basis test
- C . employee
During thanksgiving week, a nonexempt employee was paid for the following hours:
sun- none
mon- 10 hours worked
tues- 10 hrs work
weds- 8 hr sicks day
thurs- 8 hr holiday
fri-8 hr vacation
sat- 8 hr work
How many overtime hours, if any, did the ee work?
- A . 0 hours
- B . 4 hours
- C . 12 hours
Prior to beginning work for a company, a chemical engineer signed a contract stating that she agreed to work as an independent contractor. she performs all her duties in the companys laboratories, works under the companys direction, and maintains regular office hours. what is her status?
- A . independent contractor under common law
- B . independent contractor under reasonable basis test
- C . employee
An employee going to the payroll department to ask a question about his paycheck. when he arrives, the desks are unattended, files are open, desk tops are covered with paper, and the floor has stacks of reports askew.
Which customer service principle could be improved in this payroll department?
- A . reliability
- B . responsiveness
- C . assurance
- D . empahty
- E . tangibles
Which type of report does not originate from the employees earning record?
- A . taxable wages for each ee
- B . calc of the appropriate tax rates
- C . a report of form 1099 earnings
- D . payroll analysis report
which of the following plans applies only to employees of public schools, colleges and universities, and public charities?
- A . 401k
- B . 403b
- C . 457b
- D . both b and c
Last week, a high school teacher spent 40 hours in the classroom, worked 10 hours grading papers and was required to put in another 8 hours on saturday at the school sponsored science fair. under the FLSA, what overtime hours, if any, must the teacher be paid?
- A . time and a one half for 0 hours
- B . time and a one half for 8 hours
- C . time and a one half for 10 hours
- D . time and a one half for 18 hours
Whichcafeteria plan are authorized by what Internal Revenue Code Section?
- A . 125
- B . 401k
- C . 403b
- D . 457b
A financial transaction is first posted in your organizations:
- A . chart of accounts
- B . ledger
- C . journal
- D . balance sheet
Salaries earned but not yet paid in the current month must be recorded as:
- A . debit to salary payable
- B . credit to salary expense
- C . debit to cash
- D . debit to salary expense
An employee earns $1,000 weekly. his deductions are $174 for federal income tax, $62 for social security tax, and $14.50 for medicare tax. He is not supporting another family and has never been in arrears in his child support payments.
What is the maximum child support payment that can be withheld from his wages?
- A . $600
- B . $500
- C . $449.70
- D . $500.18
An employee is married with one child. His beginning salary is $1,000 semimonthly. because of an unexpected business trip, the employee fails to submit a 2020 form W4 by his first payday.
What withholding status must the employer use for his first paycheck?
- A . single/married filing separately, no entries in steps 2,3,4
- B . married filing jointly, no entries in steps 2,3,4
- C . single/married filing separately, entry in step 3 for one dependent
- D . married filing jointly, entry in step 3 for one dependent
What authority controls the frequency with which employees must be paid?
- A . state laws
- B . FLSA rules
- C . Local laws
- D . IRS rules
You receive a letter of inquiry concerning an employee.
What should you do?
- A . follow your companys policy on the release of employee info
- B . ignore the letter becuase its the employees issue
- C . send a short letter to the agency stating that the issue is being reviewed.
- D . call the requested and tell them you plan to locate the info and send it in a few months.
All of the following are reasons payroll keeps records except:
- A . compliance with laws
- B . demonstrate accuracy of paychecks
- C . demonstrate security of payroll
- D . periodic reporting
Actions that control the staff in order to protect the company against fraud include all of the following except:
- A . physical payouts
- B . rotate assignemtns
- C . segregate job duties
- D . restrict system access
Which of the following statements is correct regarding section 125 plans?
- A . employees working 10 hours a week or more must be included in the companys section 125 plan
- B . any benefits received in cash are not taxed
- C . at the end of the plan year, employees receive cash payments for amounts remaining
- D . benefits can be changed during the plan year if there is a qualified change in status
When paying supplemental wages, when must the aggregate withholding method be used?
- A . when no income tax is withheld from regular wages for the current or preceding year
- B . when the employee claims more than 10 dependents
- C . when the employee doesnt complete a form W4
- D . when the employee claims heads of household
An employee was sick the last week in december. his paycheck, dated dec 31, 2020 was held for him until he returned to work on Jan 6, 2021. these wages are taxable:
- A . in 2020
- B . in 2021
Under what conditions can an employee claim exemption from withholding on form W4?
- A . receiving overtime pay
- B . had no tax liability last year and expects no tax liability this year
- C . anticipates receiving a bonus
- D . an employee takes her first job
Which of the following plans can discriminate in favor of highly compensation employees?
- A . section 125 plans
- B . defined contribution plans
- C . 401k plans
- D . nonqualified deferred compensation plans
If you need very rapid response time with minimal lag between input and output into your computer system, look for:
- A . batch processing
- B . remote entry processing
- C . real time processing
- D . network processing
All of the following issues are concerns of external auditors except:
- A . safeguarding of the firms financial assets
- B . risks to the companys financial well being
- C . efficiency of payroll procedures
- D . material misstatements of financial statements
Payroll documentation accomplishes all of the following EXCEPT:
- A . provide uniformity
- B . simplify training
- C . ensure procedures are followed
- D . provide a reference tool
What is the effect on an employees income when the employer pays that employees share of social security and medicare taxes on a fringe benefit?
- A . there is no change
- B . the taxes paid by the employer are considered income to the employee
- C . the amount of the fringe benefit is included in the employees income
- D . there are no ss or medicare taxes on fringe benefits
All of the following deferred compensation plans limit the employee to making a deferral contribution of $19,500 in 2020 except:
- A . 401k
- B . 403b
- C . 457b
- D . nonqualified
Which tax withholidng method uses the average earnings for one pay period to determine the withholding per pay period?
- A . percentage method
- B . quarterly averaging method
- C . annualizing wage method
- D . none of the above
A waitress is paid $2.25 per hour and she receives $225 in tips during the week. She works 4o hours per week.
Which of the following is true?
- A . her employer is allowed to reduce her cash wage to no less than $2.13 per hour
- B . her base pay must be increase to $4.5 per hour after a 90 day training period.
- C . she must be paid $5.12 per hour by her employer
- D . her base salary must be raised to $3 per hour to comply with fed min wage requirements.
Which of the following employee benefits is nontaxable compensation?
- A . company vehicle (personal use)
- B . gifts, prizes awards
- C . company vehicle (business use)
- D . moving expense
What advantages does a payroll checking account provide?
- A . prevents fraud
- B . facilitates reconciliations
- C . ensures that reconciliations are completed in a timely manner
- D . ensures that checks are issued correctly
All of the following deductions are involuntary deductions EXCEPT:
- A . wage assignment
- B . tax levy
- C . child support
- D . creditor garnishment
For a payment after the employees death in the year AFTER the death, what taxes, if any, will be withheld?
- A . federal income tax only
- B . social security and medicare taxes only
- C . federal income and social security and medicare taxes
- D . no taxes will be withheld
Which plan is specifically set up for government employees?
- A . 401k plan
- B . 457b plan
- C . 403b plan
- D . nonqualified deferred compensation plan
All of the following types of records can be combined with payroll data in an integrated system except:
- A . personnel
- B . benefits
- C . purchasing
- D . human resources
An employee was recently married. the employer pays on the 15th and last day of every month. on June 10, the employee submitted a revised W4.
When must you change the amount of his withholding?
- A . on his june 15th paycheck
- B . on his june 30th paycheck
- C . on his july 15th paycheck
- D . on his july 31 paychecl
The statue of limitation for correcting a form 941 is:
- A . due date of 941 form for quarter in which error was discovered
- B . april 15 following the year error was discovered
- C . whenever discovered, up to 7 years
- D . april 15 3 years after the close of tax year error was made
When system generated tools do not agree to batch control totals, what must occur?
- A . continue processing
- B . finding the cause and correcting the error
- C . delay finding the error until more time is available
- D . document the difference and continue processing
When does an exempt W4 expire?
- A . at the end of each quarter
- B . Feb 15 of next year
- C . it continues as long as the ee is subject to ss tax
- D . dec 31 each year
How would each of the following be posted?
- A . increase in asset account
- B . decrease in liability account
- C . increase an expense account
- D . decrease an asset account
- E . increase a revenue account
A semiweekly depositor has a liability of $79,000 from Weds payday and a liability of $50,000 from Friday’s payday. The deposit is due by the:
- A . next monday
- B . next weds
- C . next friday
- D . 15th of the month
Last month, an employee emailed her mother on the company’s email, photocopied fliers for her church picnic at work and used her work computer to update her resume. These services represent:
- A . taxable compensation
- B . de minimis fringes
- C . working condition fringes
- D . no-additional cost services
All employees must complete a new form w4 each year
- A . TRUE
- B . False
When an employee begins to receive social security benefits, the employer no longer needs to withhold social security and medicare taxes.
- A . TRUE
- B . False
An employee works from midnight to 8am on a company paid holiday but does not work more than 40 hours during the workweek. under the FLSA, the employee must be paid:
- A . double time for working the holiday
- B . time and one half for working the holiday
- C . a shift differential for working the late night shift
- D . at least the federal minimum wage