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Fundamental Payroll Certification Questions and Answers

Question 1

Which of the following is true regarding payroll tax deposits?

Options:

A.

employers are penalized for failing to deposit 100% of their tax liability by the due date.

B.

employers with accumulated payroll taxes under $2500 for a month can deposit the amount due with their quarterly tax return.

C.

employers accumulating a tax liability of more than $50,000 in the lookback period file schedule B with form 941.

D.

employers must withhold taxes on noncash fringe benefits at least quarterly.

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Question 2

What benefits can be provided in a section 125 cafeteria plan?

Options:

A.

scholarships

B.

discounts

C.

medical insurance

D.

commuter vans

Question 3

If you need very rapid response time with minimal lag between input and output into your computer system, look for:

Options:

A.

batch processing

B.

remote entry processing

C.

real time processing

D.

network processing

Question 4

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?

Options:

A.

independent contractor under common law

B.

independent contractor under reasonable basis test

C.

employee

Question 5

When does an exempt W4 expire?

Options:

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

Question 6

All of the following types of records can be combined with payroll data in an integrated system except:

Options:

A.

personnel

B.

benefits

C.

purchasing

D.

human resources

Question 7

An exempt employee under the FLSA is exempt from:

Options:

A.

minimum wage only

B.

federal income tax withholding

C.

both minimum wage and overtime

D.

overtime payments only

Question 8

All of the following are reasons payroll keeps records except:

Options:

A.

compliance with laws

B.

demonstrate accuracy of paychecks

C.

demonstrate security of payroll

D.

periodic reporting

Question 9

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?

Options:

A.

$600

B.

$500

C.

$449.70

D.

$500.18

Question 10

A company is a monthly depositer for 2020. on payday, the company accumulates apayroll tax liability of $101,000. the payroll tax deposits for this liability must be made:

Options:

A.

on or before the following wednesday

B.

on or before the following friday

C.

by the next business day

D.

by the 15th the following month

Question 11

Payroll documentation accomplishes all of the following goals EXCEPT:

Options:

A.

ensuring uniformity

B.

providing a reference tool

C.

ensuring that procedures are followed

D.

simplifying training

Question 12

When an employee lives and works in the same state, the employer withholds income tax for that state.

Options:

A.

TRUE

B.

False

Question 13

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?

Options:

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

Question 14

In 2020, an employer must pay social security tax on an employees wages up to:

Options:

A.

127,200

B.

$128,400

C.

132,900

D.

137,700

Question 15

Payroll documentation accomplishes all of the following EXCEPT:

Options:

A.

provide uniformity

B.

simplify training

C.

ensure procedures are followed

D.

provide a reference tool

Question 16

FUTA taxes of more than $500 on wages paid in the first quarter must be deposited no later than:

Options:

A.

march 31

B.

april 15

C.

april 30

D.

may 1

Question 17

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?

Options:

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.

Question 18

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:

Options:

A.

next monday

B.

next weds

C.

next friday

D.

15th of the month

Question 19

An employer maintains its employee master file in computer files. which of the following statements is true?

Options:

A.

under federal law, the employer is required to keep a backup of these records

B.

employment records must be kept for 7 years

C.

there is no federal requirement to update the data monthly

Question 20

All of the following types of compensation are included in calculating an employees regular rate of pay for overtime purposes except:

Options:

A.

shift premiums

B.

production bonus of $15

C.

4 hours paid but not worked

D.

4% cost of living adjustment

Question 21

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?

Options:

A.

on his june 15th paycheck

B.

on his june 30th paycheck

C.

on his july 15th paycheck

D.

on his july 31 paychecl

Question 22

All of the following are payroll control procedures EXCEPT:

Options:

A.

external audits

B.

edits

C.

system selection

D.

security

Question 23

What authority controls the frequency with which employees must be paid?

Options:

A.

state laws

B.

FLSA rules

C.

Local laws

D.

IRS rules

Question 24

When system generated tools do not agree to batch control totals, what must occur?

Options:

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

Question 25

Which of the following is the best method of guarding against phantom employees?

Options:

A.

monthly bank reconciliation

B.

validity edits

C.

physical payout

D.

audit trails

Question 26

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:

Options:

A.

in 2020

B.

in 2021

Question 27

What advantages does a payroll checking account provide?

Options:

A.

prevents fraud

B.

facilitates reconciliations

C.

ensures that reconciliations are completed in a timely manner

D.

ensures that checks are issued correctly

Question 28

All of the following types of employees are classified as exempt from the FLSAs min wage and OT requirements except:

Options:

A.

professional

B.

outside salesperson

C.

administrative

D.

computer repairman

Question 29

A receptionist has agreed to work afternoons at the company until the company can find a full time replacement. what is the receptionists status?

Options:

A.

independent contractor under common law

B.

independent contractor under reasonable basis

C.

employee

Question 30

When an employee begins to receive social security benefits, the employer no longer needs to withhold social security and medicare taxes.

Options:

A.

TRUE

B.

False

Question 31

Which of the following types of accumulators, which one accumulates values over a period of time?

Options:

A.

segment accumulator

B.

balance accumulator

C.

compunding accumulator

D.

composite accumulator

Question 32

Which tax withholidng method uses the average earnings for one pay period to determine the withholding per pay period?

Options:

A.

percentage method

B.

quarterly averaging method

C.

annualizing wage method

D.

none of the above

Question 33

Internal control procedures include all of the following except:

Options:

A.

system interfaces

B.

rotation of duties

C.

segregating jobs

D.

account reconciliation

Question 34

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:

Options:

A.

taxable compensation

B.

de minimis fringes

C.

working condition fringes

D.

no-additional cost services

Question 35

When paying supplemental wages, when must the aggregate withholding method be used?

Options:

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

Question 36

If a state wage and hour law requires that a nonexempt employee be paid an overtime premium when the employee works more than 8 hours in a day and the employee works the following schedule, how many overtime hours must the employee be paid?

sun-5

mon-7

tues-6

weds-8

thurs-10

fri-8

sat-6

Options:

A.

0

B.

2

C.

10

D.

14

Question 37

Would each of the following entries be posted in the account as a debit (DR) or credit (CR)?

Options:

A.

purchase of a desk in an asset account

B.

purchase of stationary in an expense account

C.

withdrawal from a payroll checking account

D.

employer contributions to a 401k plan in an expense account

E.

state income tax withheld but not deposited in a liability account

F.

federal income tax withheld but not paid in a liability account

G.

mortgage payment in a liability account

Question 38

All of the following deductions are involuntary deductions EXCEPT:

Options:

A.

wage assignment

B.

tax levy

C.

child support

D.

creditor garnishment

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Total 133 questions