Download Payroll Security and Employee Compensation Practices and more Exams Payment Systems in PDF only on Docsity!
TEST BANK FOR CPP EXAM | CERTIFIED PAYROLL
PROFESSIONAL EXAM | ALL QUESTIONS AND
CORRECT ANSWERS | ALREADY GRADED A+ |
VERIFIED ANSWERS | LATEST VERSION
Which of the following plans describes a cafeteria plan under section 125 of the Internal Revenue code? A. a quantified and accountable expense reimbursement plan B. a tax-qualified retirement plan for public education institutions C. a plan which permits employees to select from two or more qualified taxable and nontaxable benefits D. a plan whereby state government employees may request that pretax dollars be set aside in a retirement account until age 59 ---------CORRECT ANSWER-----------------C. a plan which permits employees to select from two or more qualified taxable and nontaxable benefits Using federal child support guidelines, calculate the maximum amount of support that can be withheld from an employee's semimonthly disposable earnings of $1,500.00. The employee is four months in arrears in making child support payments and has no other dependents. A. $750. B. $825. C. $900. D. $975.00 ---------CORRECT ANSWER-----------------D. $975. ($1500x65%=$975) Employers in non-credit reduction states that pay their state unemployment taxes on time can deduct up to what percentage from the full FUTA tax rate in calculating their FUTA tax payments? A. 0.6% B. 4.5% C. 5.4% D. 6.0% ---------CORRECT ANSWER-----------------C. 5.4%
Which of the following items determines the disposition of unclaimed wages? A. state law only B. federal law only C. federal and state law D. no recognized procedures exist ---------CORRECT ANSWER----------------
- A. state law only An employee is terminated with 3 workdays remaining in a month. The employee earned an annual salary of $24,000 and was paid semimonthly. What is the regular compensation due this employee for the final pay period? A. $723. B. $782. C. $800. D. $869. 57 ---------CORRECT ANSWER-----------------A. $723. ($24,000/24)-(($24,000/260)x3)=$723. Employee deferrals under section 401(k) are subject to which taxes? A. federal income, social security and Medicare taxes B. social security and Medicare taxes C. social security, Medicare and FUTA taxes D. federal income, social security, Medicare and FUTA taxes --------- CORRECT ANSWER-----------------C. social security, Medicare and FUTA taxes What does it mean if, at the end of an accounting period, a company has a debit balance in a liability account? A. The company has under deposited taxes withheld from employee wages B. The company has not yet paid the third party C. The company has withheld too much from the employee
C. notifying the bank account reconciliation employees D. documenting the reason for the transaction ---------CORRECT ANSWER-----------------A. reversing the direct deposit An employee is paid $10 per hour plus a 10% differential for evening shifts. During the past week, the employee worked 24 hours on the day shift and 24 hours on the evening shift. Under the FLSA, what are the employee's gross wages for the week? A. $572. B. $522. C. $520. D. $546.00 ---------CORRECT ANSWER-----------------D. $546. (48x$10)+(24x$10x10%)=$504. $504.00/48=$10. ($504.00+($10.50x.50x8))=$546. Using the 2017 percentage method withholding tables, calculate the employee's withheld federal income tax based on the following data: Weekly pay frequency Vacation earnings: $360. Regular compensation: $239. 401(k) pre-tax deferral: $48. Married, 0 allowances A. $39. B. $21. C. $67. D. $47.15 ---------CORRECT ANSWER-----------------A. $39.8 8 $360.62+$239.38-$48.50=$551. $551.50-$525=($26.50x15%)+$35.90=$39. A request for proposal (RFP) can be used to: A. provide vendors with technical and functional system requirements B. request funds during a budget process C. analyze needs for the system
D. assign programming resources to enhance functionality --------- CORRECT ANSWER-----------------A. provide vendors with technical and functional system requirements The Family and Medical Act requires employers to maintain records for at least: A. 12 weeks B. 1 year C. 2 years D. 3 years ---------CORRECT ANSWER-----------------D. 3 years A nonexempt employee earns $400 per week for a normal schedule of 35 hours. Under the FLSA, how much would this employee be due if 48 hours were worked? A. $4 00 B. $594. C. $548. D. $433.32 ---------CORRECT ANSWER-----------------B. $594. 400/35=$11. (48x$11.43)+($11.43x.5x8)=$594. How may federal income tax be withheld from separation pay and accrued vacation wages totaling $20,000 that are paid at the time of termination and identified separately on the employee's pay stub, if the employee has been paid $25,000 so far this year and had income tax and had income tax withheld from her most recent wage payment? A. using the aggregate method only B. using the prior 12 months' tax rate C. at the optional flat rate for all payouts at termination only D. at the optional flat rate or using the aggregate method ---------CORRECT ANSWER-----------------D. at the optional flat rate or using the aggregate method
Company deadlines for payroll data input documents are essential for: A. timely processing of the payroll B. accurate entry of data C. guaranteeing that all information is processed D. adequate auditing purposes ---------CORRECT ANSWER-----------------A. timely processing of the payroll An employee earns $9 per hour and an additional 10 cents per hour for hours worked after 7:00 p.m. If an employee works from 2:00p.m. to 11:00p.m., with an unpaid meal break from 6:00 p.m. to 7:00p.m., Monday through Friday, what is the employee's weekly gross pay under the Fair Labor Standards Act? A. $ B. $ C. $ D. $364 ---------CORRECT ANSWER-----------------C. $ (40x$9)+(20x$.10)=$ The BEST reason for tracking pay-related problem statistics is to enable Payroll to: A. identify root causes and take actions to prevent similar recurrences B. apologize to clients in a more professional manner C. direct problems to those who caused the problem D. justify more resources to handle more problems ---------CORRECT ANSWER-----------------A. identify rout caused and take actions to prevent similar recurrences With regard to employees' reported tips, the employer must: A. withhold and pay only the employees' portion of social security and Medicare taxes on tips B. report taxes on tips separately when making an employment tax deposit C. report tips as wages on Form W-2 and pay the employer portion of social security and Medicare taxes
D. report and pay the employer portion of social security and Medicare taxes on the portion of cash tips above the federal minimum wage --------- CORRECT ANSWER-----------------C. report tips as wages on Form W- 2 and pay the employer portion of social security and Medicare taxes Transactions are recorded in chronological order into books of original entry called: A. registers B. vouchers C. invoices D. journals ---------CORRECT ANSWER-----------------D. journals The KEY advantage of using an automated time and attendance system is that it: A. identifies phantom employees B. reduces errors C. interfaces with the payroll system D. frees supervisors from having to review hours ---------CORRECT ANSWER-----------------B reduces errors As part of the implementation of a new payroll system, all transactions from the most recent actual payroll are processed in the new system prior to using the system to run payrolls. This is an example of what type of testing? A. compliance B. back-up C. ongoing D. parallel ---------CORRECT ANSWER-----------------D. parallel To exhibit good customer service skills, payroll staff must understand and be able to explain: A. payroll forms
B. double-entry accounting C. accrual accounting D. T-accounting ---------CORRECT ANSWER-----------------B. double-entry accounting A company pays all executives semimonthly. The FLSA requires all other employees to be paid on: A. a weekly cycle B. a biweekly cycle C. a semimonthly cycle D. any established cycle ---------CORRECT ANSWER-----------------D. any established cycle Calculate the employee's gross pay under the FLSA based on the following data: Rate of pay per hour: $8. Production bonus: $25. Shift differential per hour: $0. Total shift hours in workweek: 44 A. $380. B. $377. C. $404. D. $405.64 ---------CORRECT ANSWER-----------------D. $405. (44x$8)+(44x$.25)+$25= $ $388 / 44 = $8. $388 + ($8.82 x .5 x 4) = 17. $388 + $17.64 = $405. Which of the following answers BEST defines the term nonexempt under the FLSA? A. a lower-paid class of employees B. hourly- paid workers only C. employees who must be paid overtime
D. a special class of employees as determined by the employer --------- CORRECT ANSWER-----------------C. employees who much be paid overtime For how many years must the employer's copy of Form 940 be retained? A. 2 B. 3 C. 4 D. 5 ---------CORRECT ANSWER-----------------C. 4 Copies of the production files and most recent payroll transactions are sent nightly to the parent company in a remote location. This practice is part of what type of plan? A. security B. control C. disaster recovery D. maintenance ---------CORRECT ANSWER-----------------C. disaster recovery Employees who are not eligible for direct deposit and receive paychecks sent through the mail are constructively paid: A. on the check date B. when the checks were postmarked C. when the checks were delivered D. when the checks were cashed ---------CORRECT ANSWER----------------- C. when the checks were delivered Which of the following factors provides system security? A. access level authorizations B. shared passwords C. conducting "physical payouts"
D. $10,327.50 ---------CORRECT ANSWER-----------------D $10,327.
($38,000 + $47,000 + $50,000) x 7.65% = $10,327. On what form must mistakenly paid wages, for which no repayment is made, be reported? A. W- 2 B. W- 4 C. 1099-R D. 1099-MISC ---------CORRECT ANSWER-----------------A W- 2 A report has been requested that is NOT a standard report from the system. This type of report is called a(n): A. ad-hoc report B. integrated report C. batch system report D. edit report ---------CORRECT ANSWER-----------------A. ad-hoc report A procedure to have a time record signed by an employee indicates: A. authorization for payment B. confirmation of total hours C. hours cannot be challenged D. time spent at the establishement ---------CORRECT ANSWER-------------- ---B confirmation of total hours For an employee earning $10.20 per hour and participating in a 401(k) plan with a deferral per pay period of $50, compute the federal income taxable wages based on the following: Biweekly pay period Regular 80 hours 4 hours overtime 3 hours double-time A. $731.
B. $888.
C. $898.
D. $938.40 ---------CORRECT ANSWER-----------------B. $888.
(80 x $10.20) + (4 x $10.20 x 1.5) + (3 x $10.20 x 2) - $50 = $888. Which of the following statements is CORRECT regarding a federal tax levy? A. It does not have to be honored if any other garnishments have been served B. It requires a new order for each pay period C. It is limited only by the amount of the employee's net pay D. It is continued each pay period until a release of levy is received --------- CORRECT ANSWER-----------------D. It is continued each pay period until a release of levy is received Penalties for failure to make timely deposits are determined by: A. a flat rate of 10% for late deposits B. 5% of the undeposited amount with a maximum of $100, C. 15% of the undeposited amount with a maximum of $100, D. a four-tiered penalty structure based on the number of days the deposit is late ---------CORRECT ANSWER-----------------D. a four-tiered penalty structure based on the number of days the deposit is late An employer may exclude a business reimbursement from income when the employee's expenses meet which of the following requirements? A. reimbursements are made with regular payroll B. expenses are substantiated and excess advances are returned timely C. expenses are business-related, substantiated, and excess advances are retained for future travel D. expenses are business-related, substantiated, and excess advances are returned timely ---------CORRECT ANSWER-----------------D. expenses are business-related, substantiated, and excess advances are returned timely
A. federal income tax only B. social security and medicare taxes only C. federal unemployment tax only D. federal income, social security, medicare and federal unemployment taxes ---------CORRECT ANSWER-----------------D. federal income, social security, medicare and federal unemployment taxes Which of the following items represents an input interface to the payroll system? A. general ledger B. time and attendance C. benefit payments D. material usage records ---------CORRECT ANSWER-----------------B. time and attendance A company has a gross payroll of $120,589.36 that is taxable for federal income, social security, and medicare taxes. Federal income tax withheld is $24,117.87; combined social security and medicare taxes withheld are $9,225.09. What is the company's total payroll tax liability for this pay period? A. $33,342. B. $42,568. C. $40,156. D. $66,685.92 ---------CORRECT ANSWER-----------------B $42,568. $24,117.87 + $9,225.09 + $9,225.09 = $42,568. One reason many companies use a Zero Balance Checking Account is that: A. cash is available for investment until items are presented for payment at the company's bank B. funds do not have to be deposited until the employee cashes the check C. the company receives interest on the account
D. bank reconciliations are not required ---------CORRECT ANSWER--------- --------A. cash is available for investment until items are presented for payment at the company's bank In a customer service situation, Payroll should: A. assure the caller everything is okay, even when it is not B. get in the last word C. avoid addressing stressful issues D remain assertive and stay focused ---------CORRECT ANSWER------------- ----D. Remain assertive and stay focused Each of the following items qualifies as a de minimis fringe benefit EXCEPT: A. occasional parties and picnics for employees B. occasional supper money for working overtime C. traditional holiday gifts, such as food items D. group legal services worth less than $100 annually ---------CORRECT ANSWER-----------------D. group legal services worth less than $ annually All of the following steps are required when initiating direct deposit for an employee EXCEPT: A. prenotification B. receiving financial institution routing number C. getting authorization from the employee D. receiving employee's bank account number ---------CORRECT ANSWER-----------------A. Prenotification When paying supplemental wages along with regular wages WITHOUT specifying the amount of each, how would a company determine the amount of income tax to withhold from the supplemental wages if the
D. voided payroll checks ---------CORRECT ANSWER-----------------D. voided payroll checks Techniques for conducting periodic physical payouts: A. are the same for all employees B. vary by whether the employee is paid by check or direct deposit C. vary for some employees such as telecommuters D. vary by wage class and compensation level ---------CORRECT ANSWER-----------------A. are the same for all employees An employee is to be awarded a net bonus of $2,000 as supplemental wages in 2017. Year to date regular and supplemental earnings are $15,000. Using the current option flat tax rate and social security and Medicare rates, what should be the gross amount of the payment if the employee lives and works in a state with no income tax? A. $2,969. B. $2,906. C. $2,666. D. $2,883.92 ---------CORRECT ANSWER-----------------A. $2,000/(100% - (25%+6.2%+1.45%)) = $2,000/67.35% = $2,969. Which form is used to request an employer identification number? A. I- 9 B. SS- 4 C. SS- 5 D. SS- 8 ---------CORRECT ANSWER-----------------B. SS- 4 One element of payroll calendar is: A. pay frequency B. hire dates C. total remuneration
D. social security numbers ---------CORRECT ANSWER-----------------A. Pay frequency With online input, what is the BEST way to control miscellaneous payments? A. verification of a sample of entered data B. a visual audit of the online activity report C. an auditor's comparison of each input source document to the data base record D. a comparison of the online report totals to predetermined totals taken from the source documents ---------CORRECT ANSWER-----------------D. a comparison of the online report totals to predetermined totals taken from the source documents All of the following actions demonstrate a strong customer service orientation EXCEPT: A. exhibiting a customer friendly attitude B. viewing customers as the most important part of the job C. using voice mail to answer phone calls from customers D. establishing relationships with people ---------CORRECT ANSWER-------- ---------C. using voice mail to answer phone calls from customers Employer-sponsored athletic facilities may be nontaxable fringe benefits if the: A. employer requires substantiation of the amount, time, and business purpose of the facilities' use B. employer incurs no substantial additional cost, except labor, to provide the facilities C. facilities are on the employers' premises D. facilities qualify as a de minimis fringe ---------CORRECT ANSWER------- ----------C. facilities are on the employer's premises
