1
Q
T/F: Workers’ Compensation insurance is mandated by states and is based on worker classification and associated risks.
A
True
2
Q
T/F: The Fair Labor Standards Act has two levels of coverage: individual and enterprise.
A
True
3
Q
Which of the following employer obligations is an insurance policy, not legislation?
Sarbanes-Oxley
Workers’ compensation
Walsh-Healey
Davis-Bacon
A
Workers’ compensation
4
Q
Which act adds monetary penalties for illegal discriminatory employer actions?
Civil Rights Act of 1964
Davis-Bacon Act
Americans with Disabilities Act
Civil Rights Act of 1991
A
Civil Rights Act of 1991
5
Q
T/F: All employers’ employee information forms are legally required to contain the same information.
A
False
6
Q
TF: A foreign worker at a U.S. facility may need an H-1B visa to legally work in the United States.
A
True
7
Q
As a best practice, the employer should have the employee complete a new Form W-4:
before each pay disbursement.
each year, upon the employee’s anniversary with the firm.
every January 1.
at the time of hire.
A
every January 1.
8
Q
Which of the following factors could assist employers in determining employee pay rates?
Employee marital status
Company’s net income
Employee FLSA status
Industry type
A
Employee FLSA status
9
Q
TF: The payroll register includes a breakdown of regular earnings and overtime earnings to ensure the accuracy of employee compensation.
A
True
10
Q
Which of the following automatically exempts an employer from FLSA provisions?
The firm has an annual sales volume greater than $100,000.
The firm is a school for physically handicapped children.
The firm is a governmental agency.
The firm conducts no interstate commerce.
A
The firm conducts no interstate commerce.
11
Q
Rio is a minimum wage employee in Peoria, Illinois, where the minimum wage is $14.00 per hour. Rio’s employer claims that since the federal minimum wage is $7.25 per hour, Rio should only receive the federal amount, although the business engages in interstate commerce. What is the correct answer in this situation?
- The employer has the discretion to pay either the federal or the state-designated minimum wage.
- The employer may choose to pay less than the state-designated minimum wage based on the employee’s qualifications and job description.
- The employer is correct that the federal minimum wage overrules the state wage.
- The employer must pay the state-designated minimum wage for the area.
A
The employer must pay the state-designated minimum wage for the area.
12
Q
Which of the following is a hallmark of fringe benefits?
The benefit improves employees’ living conditions.
The ability to receive the benefit relates directly to performance.
Only certain employees have access to the benefit.
Employee welfare remains unaffected by the benefit.
A
The benefit improves employees’ living conditions.
13
Q
Which of the following is not an includible medical expense in Section 125 cafeteria plans?
Ambulance service
Over-the-counter medicines
Hearing aids
Braille books and magazines
A
Over-the-counter medicines
14
Q
Which of the following is true about employer-provided snacks and meals?
Occasionally provided snacks and meals are considered de minimis.
Snacks and meals provided on a regular basis are considered de minimis.
Holiday parties and meals provided at special gatherings are always taxable.
All employer-provided snacks and meals are taxable.
A
Occasionally provided snacks and meals are considered de minimis.
15
Q
TF: If a firm has employees in multiple states, it may need to have multiple state-based employer identification numbers.
A
True
16
Q
Which is not a step in computing net pay for each period?
Collect Form W-4
Compute gross pay
Compute taxes to be withheld
Report fringe benefit balances
A
Report fringe benefit balances
17
Q
TF: Schedule B must accompany Form 941 for a firm classified as a monthly payroll tax depositor to offer details about the amount of taxes withheld on pay dates.
A
False (must accompany Form 941 for a firm classified as a semiweekly payroll tax depositor.)
18
Q
Which of these accounts is increased by a credit?
Owners’ capital
Drawing
Assets
Expenses
A
Owners’ capital
19
Q
In general, how are the expenses associated with the payroll accountant’s labor allocated in a firm?
They are allocated as part of the firm’s overhead.
They are allocated to one department at random.
They are billed equally to all customers.
They are billed equally to each department manager.
A
They are allocated as part of the firm’s overhead.
20
Q
The _________ report assists managers with allocation of labor to company departments.
Overtime
Labor trend
Billable hours
Labor usage
A
Labor usage
21
Q
TF: Payroll and human resources legislation mirror societal evolution.
A
True
22
Q
TF: The ethical principle of integrity pertains to standards for remaining current with payroll professional development and certification.
A
False
23
Q
Which of the following is a payroll accountant’s responsibility when preparing payroll?
Withholding disbursements until after the pay date
Use of manual computations for preparation
Accessibility of payroll data to all company employees
Accuracy of payroll computations and disbursement information
A
Accuracy of payroll computations and disbursement information
24
Q
What is the most significant payroll challenge for small businesses?
Availability of payroll-trained personnel
Availability of accounting resources
Accessibility of free on-site payroll software
Accessibility of on-site payroll guidance
A
Availability of payroll-trained personnel
25
Why is outsourced payroll popular among accounting professionals?
- Payroll processing requires less oversight.
- Data generated by the outsourced company is completely accurate.
- Time demands for payroll processing decrease.
- Records generated by outsourced vendors are not subject to oversight.
Time demands for payroll processing decrease.
26
According to the PCAOB, personal or family ownership in excess of five percent of a client's business may compromise a payroll accountant's:
professional competence and due care.
objectivity and independence.
professionalism.
integrity.
objectivity and independence.
27
Employers must request a(n) _________blank by using form _________blank for the Internal Revenue Service to track a firm's payroll tax obligations.
Social Security Number; W-4
Employer Registration Number; SS-8
Tax Identification Number; W-2
Employer Identification Number; SS-4
Employer Identification Number; SS-4
28
The _________blank granted small employers tax incentives for implementing automatic retirement plan enrollment for their employees.
PATH Act
SECURE 2.0 Act
CAA Act
SAFE AGE Act
SECURE 2.0 Act
29
TF: The two focuses of payroll procedures are company needs and governmental rules.
True
30
TF: A robust payroll review process is an important activity in ensuring accurate payroll.
True
31
If a firm pays its employees semimonthly, how often does it disburse employee compensation?
Twice per month
Every week
Every two months
Every three weeks
Twice per month
32
Valen is an employee of the foreign subsidiary of a United States based company who lives and works in the United Kingdom. According to Foreign Account Tax Compliance Act (FATCA), how much of his wages may Valen exclude from United States' taxes, according to 2024 guidelines?
$108,700
$112,000
$120,000
$126,500
$126,500
33
For payroll documentation purposes, when an employee needs time away from work:
Multiple Choice
- the supervisor should authorize it verbally.
- the employee should email only department colleagues.
- upper management must approve the request.
- the request should be documented, approved, and forwarded to the payroll clerk.
the request should be documented, approved, and forwarded to the payroll clerk.
34
Erica was an employee of the Cheshire Senior Hospice System. After she resigned her employment, auditors discovered evidence of fraudulent activity that they traced to her. Erica's records must be retained:
for 10 years.
for 15 years.
for 20 years.
indefinitely.
indefinitely.
35
What is the difference between termination and resignation, as far as final pay is concerned?
- Resignation pay may be paid at the next regular pay date, but termination pay is subject to state law.
- Resignation and termination pay are subject to state regulations.
- Resignation pay must be paid within one week and termination pay must be the next business day.
- Resignation pay must be paid on the next business day and termination pay is due immediately.
Resignation pay may be paid at the next regular pay date, but termination pay is subject to state law.
36
All executive compensation must be:
- maintained in a file and purged annually.
- available for inspection by any interested party.
- annotated as to derivation and benchmarks.
- reported with the company's financial statements.
- annotated as to derivation and benchmarks.
37
Payroll records that pertain to employees who have committed fraud or other illegal actions must be ________.
retained for two years
destroyed immediately
retained indefinitely
released to law enforcement officials
retained indefinitely
38
Regulation ________ mandated disclosure of paycard-related information and fees to employees.
E
H
P
Z
Z
39
TF: Law enforcement and fire protection employees may have a work period from 7 to 28 days and may only receive overtime after a predefined time period.
True
40
TF: To compute the hourly rate for an employee with a 35-hour standard workweek, you would divide the annual salary by 1,820.
True
41
TF: The payroll register columns contain columns such as the hourly rate or period salary, insurance deduction, and taxable wages.
True
42
Which of the following automatically exempts an employer from FLSA provisions?
The firm has an annual sales volume greater than $100,000.
The firm is a school for physically handicapped children.
The firm is a governmental agency.
The firm conducts no interstate commerce.
The firm conducts no interstate commerce.
43
Stirling is a tipped employee who earns a wage of $2.13 per hour in a tip-credit state and works a standard 40-hour workweek. Last week, they earned $160 in tips. Which of the following is true?
Stirling does not have to report their tips for the week because they were less than $75.
Stirling’s employer may not report their tips for income tax purposes.
Stirling’s employer must pay them the tip credit because her wages and tips for the week were less than the federal minimum wage.
Stirling must file a request with their employer to have the tip credit applied to the wages for the week.
Stirling’s employer must pay them the tip credit because her wages and tips for the week were less than the federal minimum wage.
44
Vesper works at Hemshaw Paper Mill as a machine operator. Which of the following pay bases would be the most appropriate?
Hourly
Salary
Commission
Piece-rate
Hourly
45
TF: Fringe benefits are always a cash part of an employee’s compensation.
False
46
Fringe benefits may alter an employee’s tax computations.
True
47
TF: Gift cards received as fringe benefits must be included as taxable income.
True
48
TF: Charitable contributions are always considered post-tax deductions.
True
49
Which of the following is true about excluded fringe benefits?
They must be part of the employer's cafeteria plan.
The cash value of excluded fringe benefits is always taxable.
Excluded fringe benefits are not always a taxable part of employee pay.
Excluded fringe benefits are generally reported on the employee's W-2.
Excluded fringe benefits are not always a taxable part of employee pay. (incorrectly marked as W2 answer in course)
50
Under the unsafe conditions rule:
an employee may use a company vehicle for a one-way commute.
employees may only use company cars if their normal travel mode is unavailable.
employees may leave work at any time.
employees pay $1.50 for the one-way commute.
employees pay $1.50 for the one-way commute.
51
Employer contributions to employee health insurance must be:
added to Federal taxable wages.
reported in Social Security wages.
reported in State taxable wages.
reported on the employee’s Form W-2.
reported on the employee’s Form W-2.
52
What differentiates 401(k) and an ESOP?
401(k) plans are limited to companies with more than 100 employees.
ESOP plans are subject to all payroll taxes.
ESOP offers company stock while a 401(k) involves an employee contribution.
401(k) plans are offered by non-profit employers.
ESOP offers company stock while a 401(k) involves an employee contribution.
53
TF: If a firm has employees in multiple states, it may need to have multiple state-based employer identification numbers.
True
54
Which of the following affects an employee’s federal tax withholding for Form W-4 dated 2020 or later?
State in which the employee resides
Nature of the employee's job
Spouse’s age
Additional income
Additional income
55
The percentage method of determining an employee's federal income tax deductions __________.
is less accurate than the results gained from using the wage-bracket method
allows payroll accountants to determine Federal income tax for the firm itself
is less complex than the wage-bracket method
considers deductions for dependents and additions for other income
considers deductions for dependents and additions for other income
56
Post-Tax deductions are amounts __________blank.
that the employer withholds based on the employer's tax liability
that may include voluntary and mandatory deductions
always voluntarily chosen by the employee
that are only mandatory deductions like garnishments and union dues
that may include voluntary and mandatory deductions
57
The Social Security wage base was __________ during 2024.
$147,000
$160,200
$168,600
$142,800
$168,600
58
TF: SUTA tax is always an employer-only tax.
False
59
TF: Certain fringe benefits are not subject to federal unemployment taxes because they represent non-cash compensation that is not designed to be disposable income.
True
60
Which of the following items is never the employer's responsibility to pay?
Employee federal income tax
SUTA taxes
FUTA taxes
FICA taxes
Employee federal income tax
61
Marti’s Meats has received a letter from the IRS that due to their tax liability of $41,950 during the lookback period, they are a monthly schedule depositor. Which tax form should they file to report their payroll taxes?
Form 944
Form 940
Form 941
Form 945
Form 941
62
Pita is employed as an administrator for Postman Plus. Pita noticed that Box 1 and Box 3 amounts on the W-2 were different.
1 Wages, tips, other compensation
3 Social security wages
What is a reason why the amounts in boxes 1 and 3 would be different?
Pita received tips, which are not subject to Social Security taxes.
Pita contributed to a pre-tax 401(k) that reduced Social Security taxable wages.
Pita's wages were subject to a pre-tax garnishment.
Pita has Section 125 deductions that reduce Social Security taxable wages.
Pita has Section 125 deductions that reduce Social Security taxable wages.
63
TF: The information in the payroll register comes from the Employee Earnings Records and the General Journal.
False
64
TF: In the General Journal, transactions are listed by account number.
False
65
To which item is information from the payroll register not transferred?
Employee earnings record
General Journal
Labor reports
Company website
Company website
66
Which of the following is an example of a liability account?
Revenue
Salaries Payable
Cash
Medicare Tax Expense
Salaries Payable
67
Which of the following is an example of an asset account?
Accounts Receivable
Revenue
Liability
Owners' Capital
Accounts Receivable
68
In what order are accounts presented on the trial balance?
By grouping as debits and credits
By the order in the chart of accounts
By dollar amount
By alphabetical order
By the order in the chart of accounts
69
Why do increases in company profitability often proportionally increase payroll expenses?
Because payroll represents the activity of the business. The higher profitability often reflects an increase in labor expenses.
Because payroll represents an asset and an income of the business. The higher payroll incomes are, the higher the profitability will be.
Because payroll represents a liability and an expense of the business. The lower payroll expenses are, the higher the profitability will be.
Because payroll represents an asset and an income of the business. The lower the payroll expenses are, the higher the profitability will be.
Because payroll represents the activity of the business. The higher profitability often reflects an increase in labor expenses.
70
The _________ is the document that contains employees’ regular pay, deductions, and pay period disbursements.
Payroll register
Form W-4
Employee earnings record
Personnel file
Payroll register
71
TF: Ethical principles are codified for all payroll accountants.
False (they are guidelines only)
72
Which federal act assists workers who are displaced through no fault of their own?
HIPAA
FUTA
SUTA
ERISA
FUTA
73
TF: Three IRS common-law tests exist to determine if a worker is an employee.
True (behavioral control, financial control and relationship of parties)
74
TF: Commission-based pay is based on a percentage of sales initiated by the employee.
True
75
Why must pay rate information be a part of an employee’s payroll file?
As a means of tracking time worked for overtime compensation purposes
To ensure that the employee receives all compensation earned
As a means of ensuring pay equality among employees
To document satisfaction of court-ordered obligations
To ensure that the employee receives all compensation earned
76
Which entity bears the responsibility for gaining approval for a foreign worker H-1B visa so a foreign employee may work legally in the United States?
The employer
The employee
The U.S. State Department
The employer's home country
The employer
77
TF: Incentive Stock Options (ISOs) allow an employee to receive a relatively small base salary and shares of company stock to equal the remaining compensation for the period.
True
78
Which of the following is never true about employees who are subject to the tipped wage minimum?
The minimum wage for tipped employees is consistent among all states.
They are paid the minimum wage for the state or local area.
They earn occasional tips from other employees.
They earn more than 10% of their income from tips.
The minimum wage for tipped employees is consistent among all states.
79
Which of the following items may not be deducted on a pre-tax basis?
Cafeteria plan
Garnishments
Health insurance
Retirement plan
Garnishments
80
According to Consumer Credit Protection Act, what is a limit on the amount of a garnishment for student loans with respect to federal minimum wage weekly earnings?
It must be less than 50% of an employee’s gross earnings.
It may be 75% of the employee’s disposable income.
It must be a minimum of 10% of an employee’s annual salary.
It cannot exceed 15% of an employee’s disposable
It cannot exceed 15% of an employee’s disposable
81
TF: The most common payroll tax deposit schedules are monthly and semiweekly.
True
82
Which of the following best describes the purpose of the employee earnings record?
It is a list of all persons and companies that the company pays money during a period.
It is a report that becomes published with other financial reports.
It is a worksheet that accountants use to ensure payroll accuracy.
It is an individual register maintained for each employee, listing all the payroll information
It is an individual register maintained for each employee, listing all the payroll information
83
Why is it important for a firm to use both a payroll register and an employee earnings record?
It adds complexity to the personnel recordkeeping.
The reports are identical and provide necessary redundancy.
It facilitates accuracy in employee personnel records.
It allows payroll employees to create “ghost” employees.
It facilitates accuracy in employee personnel records.
84
Besides payroll information, the employee earnings record contains _________.
- information about the firm's liabilities
- marital status and dependent information
- proof of payroll disbursement
- the firm's payroll checking account information
marital status and dependent information
85
TF: The special accounting rule allows benefits provided in the two months of the calendar year to be reported during the following calendar year
True
86
It is a report for all stakeholders of a firm
- proof of payroll disbursement
- information about the firm's liabilities
- the firm's payroll checking account information
- marital status and dependent information
information about the firm's liabilities
87
Winter Bear Masks had annual tax liability of $78,493 during their most recent lookback period. Which form(s) must they file to reconcile their payroll taxes?
Form 944
Form 941
Form 941 and Schedule B
Form 940
Form 941 and Schedule B
88
Under the unsafe conditions rule, which of the following does not apply?
an employee may use a company vehicle for a one-way commute.
employees may only use company cars if their normal travel mode is unavailable.
employees may leave work at any time.
employees pay $1.50 for the one-way commute.
employees may leave work at any time
89
What was the purpose of the SECURE Act?
Website security
Retirement planning
Employer stability
Employee security
Retirement planning
90
When a payroll accountant transfers information from the General Journal to the General Ledger, the action is called:
accruing
annotating
posting
computing
posting
91
A High Deductible Health Plan (HDHP) has a family out-of-pocket max of ____ in 2022
$1400
$14100
$2800
$7050
$14100
92
What is the primary purpose of a labor report?
- It is a report for all stakeholders of a firm
- It communicates which departments should be eliminated
- It reports where labor is used in a firm
- It depicts the ideal distribution of labor in a firm
It reports where labor is used in a firm
93
Arden is a live-in domestic worker for a family. What is the FLSA sleep time requirement?
- Since the family conducts no interstate commerce, FLSA provisions do not apply
- Arden is not subject to sleep-time requirements
- The family must allot eight hours of sleep time, of which five hours must be consecutive
- The family must allow Arden to sleep three hours per day
The family must allot eight hours of sleep time, of which five hours must be consecutive
94
The Consolidated Appropriations Act included an increase in funding for the ____ program
E-Verify
SECURE
PATH
Medicare
E-Verify
95
Which of the following is not a privacy act specifically pertaining to payroll records?
- Computer Fraud and Abuse Act
- US Department of Health and Human Services Privacy Act 09-40-0006
- Freedom of Information Act
- Common Law Privacy Act
Freedom of Information Act
96
TF: The Medicare tax deduction for workers is 1.45% of taxable gross wages
True
97
Employee compensation such as de minimis fringe benefits, regular benefits and tax matching may amount to at least another ____ of each employee's annual pay
60%
70%
40%
50%
40%
98
State and Local Income Tax rates _____
are remitted to federal government
exist at the same level in every state
are determined by the IRS
vary among states and localities
vary among states and localities
99
TF: Besides serving as a backup in case of a computer system failure or other data breach, the employee earnings record contains the supporting data for periodic tax reports
True
100
For payroll documentation purposes, when an employee needs time away from work:
- the supervisor should authorize it verbally
- the request should be documented, approved and forwarded to the payroll clerk
- the employee should email only department colleagues
- upper management must approve the request
the request should be documented, approved and forwarded to the payroll clerk
101
Employer tax deposits are usually processed through the
EFTPS
AFTCA
ACH
EFT
EFTPS
102
Companies use ____ and ____ to allow employees to have rapid, electronic access to their compensation
direct deposit; paycards
cash; checks
cash; direct deposit
paycards; checks
direct deposit; paycards
103
Murphy is a new employee of Justice Sports. To establish identity and employment authorization, Murphy could present
a driver's license and ATM card
a current US passport
a library card and birth certificate
a college transcript and driver's license
a current US passport
104
Under the Affordable Care Act, what is a rule for a dependent to be covered under a parent's health plan?
- All employer-sponsored health plans qualify
- The dependent must be under the age of 21
- Dependents under the age of 26 are covered
- The parent must be an employee covered by a nonqualified cafeteria plan
Dependents under the age of 26 are covered
105
What types of records does IRS Regulation 26 CFR 1.6001 not cover?
Independent contractor remittance
outsourced payroll records
computerized pay records
manual pay records
Independent contractor remittance
106
Peyton is an employee of Elite Engravings a family owned and operated firm. Peyton's relative Tatum asks to postpone payroll processing due to an urgent family issue. Which ethical principle might Tatum's request violate?
Professional competence and due care
professionalism
integrity
objectivity and independence
Professionalism is the graded answer, but integrity should be?
107
Dawson worked 88 hours during a biweekly period. The company’s standard workweek is 40 hours and company policy states that employees may receive overtime or compensatory time for hours worked in excess of 40 at a rate of 1.5 times the number of hours worked. Dawson has requested compensatory time in lieu of overtime, in keeping with company policy. Dawson must receive _________ hours of compensatory time.
12
108
The percentage method of determining an employee's federal income tax deductions _________.
- is less complex than the wage-bracket method
- allows payroll accountants to determine Federal income tax for the firm itself
- considers deductions for dependents and additions for other income
- is less accurate than the results gained from using the wage-bracket method
considers deductions for dependents and additions for other income
109
What are hallmarks of Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)?
- Amounts contributed may not be rolled over from one year to the next.
- FSAs expire on an annual basis but HSAs continue perpetually.
- FSA and HSA contributions must be used in their entirety each year.
- Only HSAs may be deducted from employee on a pre-tax basis.
FSAs expire on an annual basis but HSAs continue perpetually.
110
What is the rule about adjusting and reversing entries for payroll accruals?
- Adjustments must always reflect asset changes.
- Reversing entries are required by the IRS.
- Adjusting entries are not required.
- Reversing entries are made at the company’s discretion.
Reversing entries are made at the company’s discretion.
111
Fringe benefit values must be decided by _________.
- The date they are disbursed
- January 31 of the next year
- Prior to employment
- The lesser of the book or fair market value
January 31 of the next year
112
Which of the following is used in the determination of the amount of federal income tax to be withheld from an employee per pay period?
- Date of birth
- Total deductions
- Marital status
- Prior year's tax return
Marital status
113
TF: The tipped minimum wage is the same as the federal minimum wage for all states.
False
114
What is the difference between a defined benefit and a defined contribution retirement plan?
- Defined contribution plans allow employees to determine a set amount to receive during retirement.
- Defined benefit plans allow employees to determine a specific amount of money they wish to contribute toward their retirement plan.
- The employer guarantees a specific retirement income for defined benefit plans.
- Defined benefit plans allow employees to set aside money on a tax-exempt basis.
The employer guarantees a specific retirement income for defined benefit plans.
115
TF: Payroll accruals reflect the amount of payroll earned but not paid at the end of the financial period.
True
116
TF: The Family Medical Leave Act provided paid leave and guaranteed job retention for employees.
False
117
The Families First Coronavirus Response Act included that employers with fewer than 500 employees must provide certain benefits, including:
- paid sick leave for both part-time and full-time employees.
- provision of diagnostic testing subject to health insurance.
- full-time pay for all employees who were unable to telecommute because of symptoms.
- employer-sponsored unemployment programs if business operations decreased due to health concerns.
paid sick leave for both part-time and full-time employees.
118
Ines, Incorporated, is a qualified private-sector company that provides health insurance to its employees. The company is self-insured. Which of the following forms should the company provide its employees with to comply with the Affordable Care Act?
1095-A
1095-B
1095-C
1095-B
119
Regan Accola is in the payroll department at Seven Wonders International Foods. Regan is part of a social organization, along with several of his coworkers. Which of the following ethical standards could become compromised in social situations?
Integrity
Professionalism
Professional competence and due care
Confidentiality
Confidentiality
120
Kennedy Popa is the payroll accountant for Antizio Electronics, a company that engages in federal contracts. Kennedy wants to ensure that the company is compliant with the provisions of the Davis–Bacon Act. What is the process used to monitor payroll compliance in this situation?
Contracted Payroll
Davis–Bacon verification
Certified Payroll
Outsourced Payroll
Certified Payroll
121
Choose the correct definition for USERRA.
- Legislation that governs the treatment of military service personnel
- A worker who is not subject to a company’s direction or its payroll laws
- Repealed the 180-day statute of limitations on equal pay complaints
- Mandates completion of form I-9
- The law guaranteeing marriage equality under any circumstances
Legislation that governs the treatment of military service personnel
122
Choose the correct definition for Respect for Marriage Act.
- Strengthened the child support provisions of PRWOR
- Legislation that governs the treatment of military service personnel
- A worker who is not subject to a company’s direction or its payroll laws
- Repealed the 180-day statute of limitations on equal pay complaints
- The law guaranteeing marriage equality under any circumstances
The law guaranteeing marriage equality under any circumstances
123
Choose the correct definition for internal controls documentation.
- A provision of the Sarbanes–Oxley Act
- Instituted a tiered income tax on workers
- Prohibited employment of individuals younger than 16 years of age
- Strengthened the child support provisions of PRWOR
- Legislation that governs the treatment of military service personnel
A provision of the Sarbanes–Oxley Act
124
Choose the correct definition for HIPAA.
- A worker who is not subject to a company’s direction or its payroll laws
- Repealed the 180-day statute of limitations on equal pay complaints
- Mandates completion of form I-9
- The law guaranteeing marriage equality under any circumstances
- Protects the confidentiality of employee medical records
Protects the confidentiality of employee medical records
125
Choose the correct definition for Lilly Ledbetter Fair Pay Act.
- A worker who is not subject to a company’s direction or its payroll laws
- Repealed the 180-day statute of limitations on equal pay complaints
- Mandates completion of form I-9
- The law guaranteeing marriage equality under any circumstances
- Protects the confidentiality of employee medical records
Repealed the 180-day statute of limitations on equal pay complaints
126
Choose the correct definition for Sixteenth Amendment.
- Instituted a tiered income tax on workers
- Prohibited employment of individuals younger than 16 years of age
- Mandates completion of form I-9
- The law guaranteeing marriage equality under any circumstances
- Protects the confidentiality of employee medical records
Instituted a tiered income tax on workers
127
Choose the correct definition for Walsh–Healey Public Contracts Act.
- A provision of the Sarbanes–Oxley Act
- Instituted a tiered income tax on workers
- Prohibited employment of individuals younger than 16 years of age
- Strengthened the child support provisions of PRWOR
- Legislation that governs the treatment of military service personnel
Prohibited employment of individuals younger than 16 years of age
128
Choose the correct definition for Independent contractor.
- The law guaranteeing marriage equality under any circumstances
- A worker who is not subject to a company’s direction or its payroll laws
- Protects the confidentiality of employee medical records
- Repealed the 180-day statute of limitations on equal pay complaints
- Mandates completion of form I-9
A worker who is not subject to a company’s direction or its payroll laws
129
Choose the correct definition for Personal Responsibility, Work and Family Promotion Act of 2002.
- A provision of the Sarbanes–Oxley Act
- Instituted a tiered income tax on workers
- Prohibited employment of individuals younger than 16 years of age
- Strengthened the child support provisions of PRWOR
- Legislation that governs the treatment of military service personnel
Strengthened the child support provisions of PRWOR
130
Choose the correct definition for IRCA.
- A provision of the Sarbanes–Oxley Act
- Instituted a tiered income tax on workers
- A worker who is not subject to a company’s direction or its payroll laws
- Repealed the 180-day statute of limitations on equal pay complaints
- Mandates completion of form I-9
Mandates completion of form I-9
131
Choose the correct definition for Tax Cuts and Jobs Act.
- A provision of the Sarbanes–Oxley Act
- Instituted a tiered income tax on workers
- A worker who is not subject to a company’s direction or its payroll laws
- Repealed the 180-day statute of limitations on equal pay complaints
- Reframing federal employee income tax computations
Reframing federal employee income tax computations
132
Jamie McCarthy is preparing to compute employee pay and needs to determine the amount of employee federal income taxes to be withheld. Which of the following should be consulted?
SSA Schedule 8
USCIS I-9
IRS Publication 15-T
DHS Schedule F
IRS Publication 15-T
133
According to the FLSA, what is the basis used to determine overtime worked for standard nonexempt workers?
- The 8 and 80 rule
- The excess over 8 hours in a 24-hour period
- The excess of 40 hours in seven consecutive days
- The excess over 40 hours during any pay period
The excess of 40 hours in seven consecutive days
134
Jin is an employee who receives educational assistance from their employer in the amount of $15,000 per year.
How is this amount treated for tax purposes?
$9,750 is taxable.
$5,250 is taxable.
None of it is taxable.
All of it is taxable.
$9,750 is taxable.
135
Which of the following describes the primary difference between a 401(k) and a 403(b) retirement plan?
- The 401(k) is restricted to investments in stocks only.
- The 403(b) is restricted to use by nonprofit companies.
- The 403(b) is a defined contribution-only plan.
- The 401(k) is a defined benefit-only plan.
The 403(b) is restricted to use by nonprofit companies.
136
How is disposable income computed?
- Gross pay less pre-tax deductions and income taxes
- Gross pay less mandatory deductions
- Gross pay less pre-tax deductions
- Gross pay less Social Security and Medicare taxes
Gross pay less mandatory deductions
137
By what date must a company declare the value of noncash benefits used in 2024?
- December 31, 2024
- February 1, 2025
- January 31, 2025
- January 1, 2025
January 31, 2025
138
Which of the following fringe benefits is exempt from federal income tax but subject to FICA tax?
- Moving expense reimbursements
- Working condition benefits
- Adoption assistance
- Tuition reduction for undergraduate education
Adoption assistance
139
Which of the following is a co-requisite of a health savings account (HSA)?
- A flexible spending arrangement
- A high-deductible health plan
- No employer-provided insurance
- Multiple health insurance plans held by the same employee
A high-deductible health plan
140
What is the annual maximum amount that an employee may contribute to a flexible savings arrangement before it becomes taxable income?
$3,100
$3,350
$3,200
$2,950
$3,200
141
Nuru is an employee of All-Adventure Tours. All-Adventure Tours offers tuition reimbursement as a fringe benefit.
What maximum amount may be excluded from Nuru’s taxes as a fringe benefit?
$5,250
$5,000
$4,750
$5,750
$5,250
142
To which two months does the special accounting rule pertain?
The last two months of the company’s fiscal year
January and February
December and January of the following year
November and December
November and December
143
Which of the following is true about Social Security and Medicare taxes as they pertain to earnings limits?
- Social Security tax applies only to earnings greater than the wage base.
- Highly compensated employees are subject to additional Medicare tax withholding.
- Employers must match all Medicare contributions for highly compensated employees.
- Employees contribute the same percentage of gross pay to Medicare regardless of their YTD gross pay.
Highly compensated employees are subject to additional Medicare tax withholding.
144
What is the Social Security wage base for 2024?
$147,000
$160,200
$142,800
$168,600
$168,600
145
At what income level do many employees contribute an additional percentage to their Medicare tax deduction?
$175,000
$150,000
$160,200
$200,000
$200,000
146
Which of the following is true about Social Security and Medicare tax deductions?
- They are applied to the gross pay.
- Contributions to a 401(k) plan are exempt from these taxes.
- Medicare taxes apply to all earnings at the same rate.
- Certain pre-tax deductions are exempt from Social Security and Medicare tax computations.
Certain pre-tax deductions are exempt from Social Security and Medicare tax computations.
147
Raine is a payroll clerk at Elemental Exports. The company receives written notice from the IRS that the company is a monthly schedule depositor. How is the deposit schedule determined?
- The owner's choice or remittance frequency
- The payroll tax liability during the lookback period
- The age of the company
- The total SUTA tax for the previous year
The payroll tax liability during the lookback period
148
Gold Star Printing made its required tax deposits. However, it filed its third-quarter Form 941 on December 10, after receiving a written notice from the IRS regarding the missing form. What is the failure to file penalty for Gold Star Printing?
2 percent
10 percent
5 percent
15 percent
10 percent
149
Which column exists in the employees' earnings records but not in the payroll register?
Net pay
YTD net pay
401(k) contributions
Gross pay
YTD net pay
150
Which law governs the fiduciary responsibility that employers have with regard to employees’ payroll deductions?
FICA
ERISA
ACA
FLSA
ERISA
151
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