FPC Test random questions

What is the Medicare Rate?

1.45%

Under IRS regulations, how many years must a returned Form W-2 be retained?

4

What is the Social Security Rate? (EE)

6.2%

Payments from a qualified pension plan are reported on Form: A. 1099-R. B. 1099-MISC. C. W-3. D. W-2.

A. 1099-R.

Which of the following payroll issues are governed only by the states? A. When final wages must be paid B. Treatment of wages after death C. Garnishments D. Child support

A. When final wages must be paid

Payroll documentation should be written: A. simply enough to allow payroll functions to be completed with little assistance. B. with an emphasis on payroll policies including when checks are made available. C. with a priority on confidentially so that only payroll personnel can understand. D. by company attorneys to ensure that practices are in compliance with the law.

A. simply enough to allow payroll functions to be completed with little assistance.

State Laws regulate which of the following? Select all that apply. A.Information listed on the pay/earnings statement B.Designated workweeks C.Timing of Payment D. Method of Payment

A/C/D

The FLSA requires employment forms to be kept for how many years? A.2 B.3 C.4 D.5

B

Which form is for Withholding on Pension or Annuity Payments? A. W-2P B. W-4P C. 1099-P D. I-9P

B. W-4P

The common law test is made up of all of the following factors EXCEPT: A. relationship of the parties. B. benefits provided. C. behavioral control. D. financial control.

B. benefits provided.

When calculating an employee's net pay, all of the following amounts are subtracted from gross earnings EXCEPT: A. 401(k) contributions. B. taxable wages. C. cafeteria plan contributions. D. federal income tax.

B. taxable wages.

Who determines the priority of voluntary deductions? A. IRS B. State the employee works in C. Employer D. Employee

C. Employer

Exempt Employees: CAPES

Computer Professionals Administrative Professionals Executives Salespersons

Federal law (CCPA) limits the maximum amount that can be withheld from an employee's compensation for child support. What are the maximum percentages that can be withheld? A. 10%, 20%, 25%, or 45% of gross pay B. 10%, 20%, 25%, or 40% of disposable pay C. 50%, 55%, 60%, or 65% of gross pay D. 50%, 55%, 60%, or 65% of disposable pay

D. 50%, 55%, 60%, or 65% of disposable pay

What is the maximum tax an employer can pay for Social Security taxes? A. No maximum B. 7,254 C. 7,316 D. 7,347

D. 7,347

According to the IRS, which of the following employee records must be retained? A. Anticipated date of next pay increase B. Date marital status changed C. Date employment application submitted D. Allowances

D. Allowances

When does a depositor's status change because the $50,000.00 threshold during the lookback period has been exceeded? A. Semiweekly B. Monthly C. Quarterly D. Annually

D. Annually

What is the definition of disposable earnings for creditor garnishments? A. All compensation for services, including wages, salary, commissions, and bonuses B. Gross wages less federal/state/local taxes, court-ordered child support, and levies C. Gross wages less federal/state/local taxes and court-ordered child support D. Gross wages less all deductions required by law

D. Gross wages less all deductions required by law

Under the IRS regulations, an employer MUST include non-cash fringe benefits in an employee's income at least: A. each pay period. B. quarterly. C. semiannually. D. annually.

D. annually.

FSLA governs: MOECPR

Minimum Wage Overtime Equal pay for Equal work Child Labor Restrictions Public Service Contracts Recordkeeping

Statutory Non-employee: REDS

Real Estate Agents Direct Sales -EE's treated as Independent Contractors -No TAX w/held

An employee earns $1,031.00 semimonthly and with this paycheck receives a $300.00 production bonus. Deductions include $126.00 for federal income tax, $101.82 for social security and Medicare tax, $125.00 for court-ordered child support payments, and a $25.00 credit union payment. For this pay period, calculate the employee's semimonthly disposable pay for a creditor garnishment.

$1,103.18.

Under the FLSA, a workweek consists of how many hours?

168 (24 x 7)

Under the FLSA, what is the minimum hourly rate an employer can pay a tipped employee working 30 hours a week and receiving $400.00 a week in tips?

2.13

Employees covered by FLSA are called A.Exempt B.Salary C.Hourly D.Non-Exempt

A

What election do employees make when they choose to have the fair market value of stock included in income before the stock has been vested? A. 83(b) B. 125 C. 132(f) D. Special accounting rule

A. 83(b)

Which of the following documents must be retained for at least three years? A. Collective bargaining agreements B. Billing records C. Wage rate tables D. Employee's work time schedules

A. Collective bargaining agreements

The frequency of payments to employees is governed by: A. State regulations only. B. DOL regulations only. C. Both DOL and state regulations. D. No laws or regulations govern the frequency of pay to employees.

A. State regulations only.

The management trait that best fits Covey's principle-centered leadership management style is to: A. strive to nurture security, guidance, wisdom, and power. B. emphasize trust, communication, and accountability. C. excel at coaching employees. D. have low task, high relationship.

A. strive to nurture security, guidance, wisdom, and power.

Under the FLSA, when a highly compensated exempt employee receives less than $100,000.00 in compensation during the year, the employer may: A. within one month after the end of the year, make a final payment to the employee to reach $100,000.00 in annual compensation. B. make a payment in the second month after the end of the year allowing the employee's compensation to reach $100,000.00. C. not make a payment after the end of the year allowing the employee's compensation to reach $100,000.00. D. automatically change the employee's classification to an administrative exempt employee.

A. within one month after the end of the year, make a final payment to the employee to reach $100,000.00 in annual compensation.

The following situations are maximum periods of health insurance continuation coverage under COBRA EXCEPT: A. 18 months for an employee's termination. B. 24 months for long-term disability. C. 29 months for social security disability during the first 60 days of continued coverage. D. 36 months for an employee's death.

B. 24 months for long-term disability.

Form _____ is for Notice of Levy on Wages, Salaries, and Other Income: A. Form 688-W B. Form 668-W C. Form 866-W D. Form 886-W

B. Form 668-W

A charitable contribution is substantiated with which two documents? A. Driver's license and social security card B. Form W-2 and pledge card C. Forms W-2 and 941 D. Pay stub and company I.D. card

B. Form W-2 and pledge card

IWO stands for: A. Inclusive Withholding Order B. Income Withholding Order C. Income Wage Order D. Inclusive Wage Order

B. Income Withholding Order

The payroll department must withhold deductions from an employee who has charitable contribution, health insurance, union dues and a medical support order. Which deduction is the first to be withheld? A. Health insurance B. Medical support order C. Charitable contribution D. Union dues

B. Medical support order

Which of the following transactions is posted as a credit? A. Gross pay, posted to an expense account B. State income tax withheld not deposited, posted to the liability account C. A mortgage payment, posted to the liability account D. A deposit to the payroll checking account, posted to the payroll checking account

B. State income tax withheld not deposited, posted to the liability account

What does the perjury statement on Form W-4 indicate? A. The employer has verified the data on the form B. The employee attests to the accuracy of the data C. The employee disputes the data entered on the form D. The employee agrees with all the statements on the form

B. The employee attests to the accuracy of the data

A retired employee receiving periodic distributions from a qualified retirement plan should complete Form: A. W-4. B. W-4P. C. W-4V. D. W-4S.

B. W-4P.

When a nondiscretionary bonus is included in a nonexempt employee's regular rate of pay, the bonus is allocated to: A. the pay period the bonus is paid. B. all workweeks during the period in which the bonus was earned. C. the workweek the bonus is paid. D. all workweeks in the last 12 months.

B. all workweeks during the period in which the bonus was earned.

According to Kotter, leadership is characterized as: A. security, guidance, wisdom, power. B. direction, alignment, motivation, change. C. guidelines, resources, accountability, consequences. D. planning, organizing, controlling, order.

B. direction, alignment, motivation, change.

Types of taxable compensation include: Select all that apply. A.Business use of a company vehicle B.Nonqualified moving expenses C.Disability benefit disbursements from employee contributions B.Qualified employee discounts on employer goods/services

B.Nonqualified moving expenses

Employers making quarterly deposits accumulate a payroll tax liability of less than: A. $2,500.00 for the month. B. $1,000.00 for the month. C. $2,500.00 for the current or previous quarter. D. $3,000.00 for the quarter.

C. $2,500.00 for the current or previous quarter.

When an employer deposits electronically and needs to initiate the tax deposit on the due date, which method is used? A. EFTPS-Direct B. EFTPS-Through a Financial Institution C. ETA D. Form 941

C. ETA

Which of the following statements is true about 401(k) plans? A. Employers must match employee contributions to a 401(k) plan. B. A 401(k) plan must allow eligible employees to contribute up to 15% of their wages. C. Employee contributions to a 401(k) plan are taxable for social security and Medicare taxes. D. A 401(k) plan is designed primarily for employees of tax-exempt organizations.

C. Employee contributions to a 401(k) plan are taxable for social security and Medicare taxes.

An employee's disposable pay is $750.00 with attachments received in the following order: $175.00 federal tax levy $125.00 property tax levy $75.00 state tax levy $50.00 creditor garnishment Which wage attachment has first priority? A. State tax levy B. Creditor garnishment C. Federal tax levy D. Property tax levy

C. Federal tax levy

When is Copy B of Form W-2 due to each employee? A. December 31 B. January 15 C. January 31 D. The last day of February

C. January 31

On June 1, an employee was married and changed Form W-4 status from single to married and the number of allowances from one to two. Pay dates are June 12, June 26, July 10, and July 24. If the employee submits a new Form W-4 on June 1, Payroll must implement the change by: A. June 12. B. June 26. C. July 10. D. July 24.

C. July 10.

If the FUTA tax liability is more than $500.00, when must the FUTA tax be deposited? A. Semiweekly B. Monthly C. Quarterly D. Annually

C. Quarterly

Which of the following documents must be retained for at least four years? A. Record of employee's hours worked each week B. Record of the regular rate of pay C. Record of withheld taxes D. Record of employee's amounts earned for straight time and overtime

C. Record of withheld taxes

An accounting document listing all accounts by name and number is a(n): A. journal. B. income statement. C. chart of accounts. D. general ledger.

C. chart of accounts.

When recording tax liabilities on Form 941, semiweekly depositors must: A. check the semiweekly box and enter the semiweekly liability on Line 14. B. enter the semiweekly liability on Line 14. C. check the semiweekly box on Line 14 and complete Schedule B. D. check none of the boxes and go on to Part 3.

C. check the semiweekly box on Line 14 and complete Schedule B.

The federal definition of disposable earnings for a creditor garnishment is: A. gross wages less taxes and court-ordered child support. B. gross wages less taxes, court-ordered child support, and levies. C. gross wages less deductions required by law. D. all compensation for services, including wages, salary, commissions, and bonuses.

C. gross wages less deductions required by law.

A qualified medical child support order: A. recognizes the right of the child to be covered by the custodial parent's group health plan. B. requires the employer to add a new group health plan to cover the custodial parent's children. C. recognizes the right of the child to be covered by a parent's group health plan. D. requires the employer to add a new group health plan to cover the noncustodial parent's children.

C. recognizes the right of the child to be covered by a parent's group health plan.

Agreements between the U.S. and foreign countries designed to avoid double taxation of income are called: A. bona fide residence agreements. B. foreign earned income exclusions. C. tax treaties. D. totalization agreements.

C. tax treaties.

If an employee's paycheck is available on September 30, but the employee does not pick up their check until October 15, when were the employee's wages constructively received? A.October 6 B.October 15 C.September 30 D.October 9

C.September 30

What are the two types of Employment Taxes? A.Federal Income Tax and Social Security B.Federal Income Tax and Medicare C.Federal Income Tax, Federal Unemployment D.Social Security and Medicare

D

Which of the following statements is true regarding involuntary wage attachments under federal law? A. State law can require a higher percentage of disposable pay for child support deduction than the federal law. B. A non-custodial parent must be in arrears before withholding can be ordered for child support. C. The priority on wage attachments is (1) student loan garnishment, (2) child support and (3) federal tax levy. D. For employees supporting another family and not in arrears, child support deductions cannot exceed 50% of disposable pay.

D. For employees supporting another family and not in arrears, child support deductions cannot exceed 50% of disposable pay.

When an employee receiving payments from a third-party sick pay provider fails to complete a Form W-4S, how much, if any, federal income tax is withheld from the payments? A. A flat $20.00 per payment B. A flat 25% per payment C. Withholding is based on marital status of single and zero allowances D. No federal income tax is withheld

D. No federal income tax is withheld

Under the FLSA, which of the following documents must be retained for at least three years? A. Record of allocated tips B. Record of withheld taxes C. Record of the amount and date of employee's wage payments D. Record of employee's hours worked each week

D. Record of employee's hours worked each week

Which of the following documents must be retained for at least four years? A. Work time schedules B. Wage rate tables C. Billing records D. The amount and date of an employee's wage payments

D. The amount and date of an employee's wage payments

When an employee's YTD wages exceed the social security maximum wage base but are less than $200,000, what adjustment, if any, is made in the gross-up formula? A. No adjustment is made B. The total tax percentage is increased by the Medicare tax rate C. An adjustment to the net amount is made D. The social security tax rate is not used

D. The social security tax rate is not used

When an employee is subject to a federal tax levy, the deductions allowed when determining the amount due to the IRS include: A. federal income, social security, Medicare, state income taxes, deduction for dependent health insurance, and child support deduction only. B. federal income, social security, Medicare, state income taxes, and child support deduction only. C. federal income, social security, Medicare, and state income taxes only. D. all deductions in effect on the date the levy is received.

D. all deductions in effect on the date the levy is received.

A cafeteria plan may be funded by any of the following EXCEPT: A. salary reduction. B. after-tax employee contributions. C. flex dollars or flex credits. D. benefit exchange dollars.

D. benefit exchange dollars.

The payroll tax deposit due date falls on a nonbusiness day. A monthly depositor must deposit its payroll tax liability: A. by the end of the month. B. by the end of the following week C. within three business days. D. by the next business day.

D. by the next business day.

Nonqualified stock options are subject to federal income tax withholding when the: A. stock is purchased by the employer. B. option is granted by the company. C. stock is sold by the employee. D. employee exercises the option.

D. employee exercises the option.

An employee provides a new Form W-4 on August 15. The employer must retain the prior Form W-4 until: A. January 1 of the following year. B. April 15 of the following year. C. four years after the new form was filed. D. four years after the last tax return was filed using the information on the Form W-4.

D. four years after the last tax return was filed using the information on the Form W-4.

Employees can file an exempt Form W-4 when they: A. expect to owe no taxes this year. B. do not want taxes withheld this year. C. owed taxes last year and expect to owe taxes this year. D. had no tax liability last year and expect to have no tax liability this year.

D. had no tax liability last year and expect to have no tax liability this year.

An individual with a supportive communication style is described as one who: A. wants things arranged logically in beginning-to-end sequences. B. enjoys speculating on possibilities before getting down to the facts. C. prefers facts over speculation and insists on real-world proof. D. is most interested in how an idea will affect other people.

D. is most interested in how an idea will affect other people.

An individual receiving a taxable periodic distribution from a qualified pension plan does not file Form W-4P. With no Form W-4P on file, what marital status and allowances is used to calculate federal income tax withholding? A. single with 0 allowances. B. single with 1 allowance. C. married with 2 allowances. D. married with 3 allowances.

D. married with 3 allowances.

An employer's responsibilities with Form W-4 include: A. requesting a new Form W-4 from each employee each year. B. verifying that an employee's withholding allowances are accurate. C. filing all new Forms W-4 with the IRS every year. D. reminding employees by December 1 to submit a new Form W-4 if their marital status or number of allowances has changed.

D. reminding employees by December 1 to submit a new Form W-4 if their marital status or number of allowances has changed.

Unearned income includes all the following items EXCEPT: A. capital gains. B. dividends. C. interest. D. wages

D. wages

Statutory Employee: DISH

Drivers Insurance salesperson Salespersons Homeworkers -treated as EE's -subject to FICA and FUTA-NOT FIT