APA Payroll Certification

A balance sheet equation is: a. Assets = Owner's Equity - Liabilities. b. Owner's Equity = Assets + Liabilities. c. Assets = Liabilities + Owner's Equity. d. Net Earnings = Assets - Liabilities.

c. Assets = Liabilities + Owner's Equity.

Under the FLSA, calculate the overtime premium pay for a nonexempt employee who is paid $10.00 per hour and works 45 hours in the workweek. a. $25.00 b. $75.00 c. $450.00 d. $475.00

a. $25.00

What transaction is posted as a debit? a. $250,000.00 deposit, posted to the payroll checking account b. $6,000.00 liability for medical insurance premiums withheld from employees' wages but not yet paid to provider, posted to the liability account c. Payroll checks issued to employees, posted to the payroll checking account d. Payroll tax liability of $55,000.00, posted to the liability account

a. $250,000.00 deposit, posted to the payroll checking account

Which of the following journal entries is posted as a debit? a. $250,000.00 gross payroll, posted to an expense account b. $8,000.00 manual check, posted to the asset account c. $5,000.00 paycheck, posted to the cash account d. $1,000.00 state income tax withheld, posted to the liability account

a. $250,000.00 gross payroll, posted to an expense account

Which of the following journal entries is posted as a debit? a. $3,000.00 employer 401(k) plan contributions, posted to an expense account b. $500.00 overpayment repaid by employee, posted to expense account c. $55,000.00 payroll tax liability, posted to the liability account d. $5,000.00 state income tax withheld, posted to the liability account

a. $3,000.00 employer 401(k) plan contributions, posted to an expense account

Which of the following journal entries is posted as a debit? a. $5,000.00 purchase of calculators, posted to the asset equipment account b. $55,000.00 payroll tax liability, posted to the liability account c. $8,000.00 manual check, posted to the asset account d. $5,000.00 paycheck, posted to the cash account

a. $5,000.00 purchase of calculators, posted to the asset equipment account

To determine if an employer is a monthly or semiweekly depositor for 2021, the lookback period is: a. January 1 - December 31, 2019. b. July 1, 2019 - June 30, 2020. c. October 1, 2019 - September 30, 2020. d. January 1 - December 31, 2020.

b. July 1, 2019 - June 30, 2020

Which of the following actions is perhaps the MOST important communication skill? a. Nonverbal behavior b. Listening c. Posture d. Speaking

b. Listening

Regular rate of pay

total regular pay divided by total number of hours worked

As of December 1, an employee had earned $171,700.00 in salary, commissions, and bonuses. The employee's semimonthly salary is $4,200.00. Calculate the social security and Medicare taxes to be withheld from the employee's first pay in December.

$60.90

When an employee is subject to a federal tax levy, the deductions allowed when determining the amount due to the IRS include:

All deductions in effect on the date the levy is received

Which of the following payroll issues is ONLY governed by state agencies? a. Minimum wage b. Frequency of pay c. Exempt or nonexempt employee status d. Child labor

b. Frequency of pay

An advertising department manager, supervising five full-time employees, is paid a monthly salary of $3,126.00. Last month, the employee worked 35 hours the first week, 55 hours week two, 40 hours week three, and 50 hours week four. Under the FLSA, how many hours of overtime, if any, must the employee be paid?

$0.00

An employee rides 430 miles monthly to work in a company provided 7-passenger van used exclusively for commuting. The employer has organized a vanpool, offering rides to four other employees. The employer uses the cents-per-mile method to determine the value of the commute. Calculate the taxable amount of the benefit.

$0.00 Under IRS rules, when an employer provides the qualified transportation fringe benefit in a vanpool the special valuation method used to determine the value of the personal of a company vehicle -- cents per mile ($0.560 per mile) -- may be used to determine the fair-market value of the benefit. The qualified transportation fringe benefit's monthly exclusion is $270.00. Amounts in excess of $270.00 per month are taxable.

Calculate an employee's net pay based on the following information. Paid biweekly Hourly rate = $18.00 Nonexempt employee Hours worked week 1 = 45 Hours worked week 2 = 50 2021 W-4 information = Head of Household, Step 3 = $2,000 (1 qualified child under age 17) YTD Wages = $27,000.00 401(k) contribution = 1% of wages Use the Percentage Method (Worksheet 4 in Publication 15-T)

$1,640.83

An employer receives a federal tax levy for a salaried employee who is paid $4,277.00 semimonthly and claims Married filing jointly with 4 dependents on Form 668-W. With no new deductions after the receipt of the levy, what net pay will the employee receive on the next paycheck?

$1,762.51

An employer receives Form 668-W on April 29, 2021. The employee claims married filing jointly with 3 dependents. The employee's biweekly wages are $2,700.00. Prior to this period, the employee's deductions for each pay period consisted of: federal income tax $228.00, state income tax $123.00, social security tax $158.58, Medicare tax $37.09, pre-tax health insurance $142.26, and 401(k) plan $100.00. Calculate the employee's take-home pay.

$1,911.07 Under IRS rules, the employee's take home pay is the employee's gross pay less all deductions in effect before the levy was received

An employee earns $1,400.00 per month and contributes 1% to a 401(k) plan. The employee is paid semimonthly and claims single with no adjustments on Form W-4. Calculate the federal income, social security, and Medicare taxes to be withheld from the employee's 401(k) contribution each month.

$1.07 Under IRS rules, employee contributions to a 401(k) plan are not subject to income tax, but are subject to social security (6.2%) and Medicare (1.45%) taxes.

Using the Optional Flat Rate Method, calculate the federal income tax withholding based on the following information. An employee claims single with no other adjustments on a 2021 Form W-4. The employee is paid a bonus of $480.00 and has YTD wages of $15,000.00.

$105.60

An employee earns $1,040.00 semimonthly and with this paycheck receives a $240.00 production bonus. Deductions include $88.80 for federal income tax, $97.92 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.

$1093.28

An employee earns $50,000.00 annually, is paid biweekly and contributes $150.00 each payroll to a 403(b) plan. Calculate any federal taxes that must be withheld each payday from the 403(b) contribution.

$11.48 Under the IRS rules, employee contributions to a 403(b) plan are not subject to income tax but are subject to social security (6.2%) and Medicare (1.45%) taxes.

An employee, age 52, purchased $100,000.00 of group-term life insurance through the company's Sec. 125 plan on a pre-tax basis. The company pays $0.20 per $1,000.00 for the coverage. Using IRS Uniform Premium Table I, located in the Tables and Rates on the toolbar, for group-term life insurance, calculate the taxable value of the group-term life insurance for the month of January.

$11.50

What penalty may be assessed against a company that files its 2021 Forms W-2 electronically with the SSA on May 15, 2022?

$110.00 per Form W-2.

An employee, paid $2,000 biweekly, has a marital status of Married, claiming 2 allowances on Line 5 of a 2019 Form W-4. $50 is entered in the box on Line 6. Using the Percentage Method for Manual Payroll Systems (Worksheet 5), calculate the federal income tax amount to be withheld for the pay period.

$168.40

An employee earns $55,100.00 annually, is paid biweekly and defers 4% to a 401(k) plan. Calculate any federal taxes to be withheld from the employee's annual 401(k) deferral.

$168.61 Under IRS rules, employee contributions to a 401(k) plan are not subject to income tax but are subject to social security (6.2%) and Medicare (1.45%) taxes.

An employee was transferred to a new office and the company agreed to pay all moving expenses including taxes. The real-estate expenses were $6,900.00, moving van was $3,500, airfare to the new location was $1,250, and lodging was $550. There is no state or local withholding and no house hunting trips. The employee's year-to-date earnings are $10,000.00. Using the Optional Flat Rate Method, calculate the employee's taxable income for the move.

$17,341.86

An employer transferred an employee in a relocation-related move and reimbursed the employee's moving expenses. The employee spent $2,000.00 on house hunting, $5,000.00 to move household goods, $500.00 for airfare to travel to the new location, and $10,000.00 in real estate commissions to sell the house. Calculate the amount of taxable moving expenses.

$17,500.00 Under IRS rules, moving expenses are no longer considered qualified. Therefore, all expenses reimbursed for relocation-related moves are taxable

An employer receives a federal tax levy in the amount of $10,000.00 for an employee. The employee is paid $650.00 weekly. The employee's deductions in place when the levy is received are $123.73 for federal taxes and $30.00 for a creditor garnishment. The employee returns Part 3 of Form 668W indicating single with 1 dependent(s). Calculate the amount, if any, to be deducted per pay to satisfy the levy.

$172.23

A tipped employee is paid $2.78 per hour and receives $127.04 per week in tips. The employee worked 17 hours last week. How much of the tipped employee's compensation is subject to federal income, social security, and Medicare tax withholding?

$174.30

An employee's gross wages are $2,000.00. Deductions are $153.00 for social security and Medicare taxes, and $400.00 for federal income tax. Under the CCPA requirements, what amount can be attached for a child support order if there is no second family and support is not in arrears?

$2,000.00 - $153.00 - $400.00 = 1447 * 60% = $868.20

An employee receives a $1,600.00 net bonus at year-end. When receiving the bonus, the employee's year-to-date taxable compensation is $151,300.00. There is no state or local tax withholding. Using the Optional Flat Rate Method, calculate the taxable income of the bonus.

$2,090.14

An employee works part-time, 3 hours a day, Monday through Friday, earns minimum wage, and is paid every Friday. The employee submitted a 2021 Form W-4 indicating a filing status of Married filing jointly and $20 in Step 4(c). Using the Wage Bracket Method, caclculate the employee's federal income tax withholding for the week.

$20.00

An employee works part-time, 3 hours a day, Monday through Friday, earns minimum wage, and is paid every Friday. The employee submitted a 2021 Form W-4 indicating a filing status of Married filing jointly and $20 in Step 4(c). Using the Wage Bracket Method, calculate the employee's federal income tax withholding for the week.

$20.00

A nonexempt sales employee is paid $14.00/hour and is paid weekly. She also receives a 9% commission on net sales. The commission is included in the first payroll of the month following the sale. Last month, the employee had $12,000.00 in net sales for the month (the company averages sales for each workweek) and worked 45 hours during the second workweek of the month. Calculate the employee's regular rate of pay for that week.

$20.00/hour To calculate the regular rate of pay, add 25% of the employee's sales commission (1 week average) to the pay for time worked during the week and divide by the number of hours worked. Step 1. Pay for time worked: 45 hours x $14.00 = $630.00Step 2. Sales commission: ($12,000.00 x 9%) x 25% = $270.00Step 3. Total pay with commission: $630.00 + $270.00 = $900.00 Step 4. Regular rate of pay: $900.00 ÷ 45 hours = $20.00/hour

An employee earns $3,200 biweekly and claims Married Filing Jointly with 3 dependents under the age of 17 on a 2021 Form W-4 ($6,000 in Step 3). Using the Wage Bracket Method, calculate the employee's biweekly federal income tax withholding.

$23.23 Use Worksheet 2 from Publication 15-T: Step 1: Adjust the employee's wage amount by reducing the gross wages by any nontaxable wages. Since there are no entries in Step 4 of Form W-4, this is the Adjusted Wage Amount. Step 2: Locate the Biweekly Payroll Period table. Locate the row which includes $3,200. Move to the column for Married Filing Jointly, Standard withholding to determine the tentative witholding amount. Step 3: In Step 3 of Worksheet 2, divide the amount in Step 3 of Form W-4 by 26 ($6,000/26 = $230.77) and subtract from the tentative withholding amount to get the answer. Step 4: Nothing is reported on Form W-4, Step 4(c) so skip Step 4 of the worksheet. The amount in Step 3, Line 3c is the amount to withhold from the employee's wages this pay period.

An employee, age 52, purchased $170,000.00 of group-term life insurance through the company's Sec. 125 plan on a pre-tax basis. The amount paid was $0.10 per $1,000.00 of coverage. Using the IRS Uniform Premium Table I which is located in Tables and Rates on the toolbar, calculate the taxable value of January's group-term life insurance.

$27.60 Under IRS rules, calculate the taxable value of excess GTL coverage with six steps: 1) Determine the GTL coverage; 2) Calculate the excess coverage (the amount over $50,000); 3) Divide the excess by $1,000; 4) Determine the employee's age on December 31; 5) Using IRS Table 1 Uniform Premium for one month, multiply the value for the employee's age by the amount from Step 3; 6) Subtract any after-tax GTL deductions from the employee's pay to determine the taxable amount.

A tipped employee is paid $4.03 per hour and receives $187.88 per week in tips. The employee worked 24 hours last week. How much of the tipped employee's compensation is subject to federal income, social security, and Medicare tax withholding?

$284.60

An employee earns $70,300.00 annually, is paid biweekly and defers 10% to a 401(k) plan. Calculate any federal taxes to be withheld from the employee's annual 401(k) deferral.

$537.79 Under IRS rules, employee contributions to a 401(k) plan are not subject to income tax but are subject to social security (6.2%) and Medicare (1.45%) taxes.

An employee earns $19.00 per hour, works a 40-hour workweek, and receives no other compensation. Calculate the social security and Medicare taxes withheld from the employee's weekly paycheck.

$58.14

A nonexempt sales employee is paid $12.00 per hour and is paid weekly. She also receives a 10% commission on net sales each month. The commission is included in the second payroll of the month following the sale. The company averages the commission for all workweeks in the month. Last month, the employee had $13,000.00 in net sales and worked 49 hours during the second workweek of the month and was paid her overtime premium for the week. Calculate the additional overtime premium pay due the employee for the second week of last month.

$29.88 To calculate the additional overtime premium pay, subtract the employee's overtime premium paid in the prior month without sales commission from the overtime premium pay calculated with the sales commission. Step 1. Pay for time worked: 49 hours × $12.00 = $588.00 Step 2. Previous overtime premium pay: $12.00 × 0.5 × 9 hours = $54.00 Step 3. One week sales commission: ($13,000.00 × 10%) × 25% = $325.00 Step 4. Total pay with commission: $588.00 + $325.00 = $913.00 Step 5. Regular rate of pay: $913.00 ÷ 49 hours = $18.63 Step 6. Overtime premium rate: $18.63 × 0.5 = $9.32 Step 7. Adjusted overtime premium: $9.32 × 9 hour(s) = $83.88 Step 8. Additional overtime premium pay: $83.88 - $54.00 = $29.88

An employee drove a company vehicle 9,300 miles on business and 5,800 miles for personal use. When the employee and vehicle qualify for the cents-per-mile method, calculate the amount included in income.

$3,248.00

Calculate an employee's net pay based on the following information: Paid biweekly Annual salary = $120,000 Exempt employee Hours worked week 1 = 45 Hours worked week 2 = 50 2021 W-4 information = Head of Household, Step 3: $6,000 (3 qualified children under 17) YTD Wages = $87,500 YTD 401(k) = $19,000 401(k) contribution = 20% of wages Employee's age = 46 Use the Percentage Method and Worksheet 4 from Publication 15-T

$3,464.73

An employee earns $26,182.73 per month and is paid semimonthly. The employee has received no income other than regular wages during the year. Calculate the amount of social security and Medicare taxes to be withheld from the first pay in December.

$307.65 If the employee's year-to-date social security wages are less than or equal to the social security wage base ($142,800.00), multiply the wages by the social security tax rate (6.2%). If the year-to-date wages are greater than the social security wage base, multiply the taxable wages only by the Medicare tax rate (1.45%) to calculate the Medicare taxes to withhold. And if the year-to-date Medicare wages are greater than $200,000.00, multiply the amount above $200,000.00 by the Additional Medicare tax rate (0.9%) to calculate the Additional Medicare taxes to withhold.

Using the Percentage Method, calculate the federal income tax withholding based on the following information. An employee earns $660.00 semimonthly and claims single with 1 allowance(s) on a 2019 Form W-4.

$31.60

An employee, qualifying for the cents-per-mile method, drove a company vehicle 10,000 miles on business and 8,800 miles for personal use. Calculate the employee's income for the personal use of the vehicle using the cents-per-mile method.

$4,928.00

Using the Optional Flat Rate Method, calculate the federal income tax withholding based on an employee's supplemental wage payment of $200,000.00. The employee has received $500,000.00 in supplemental wages during the year.

$44,000.00 When calculating federal income tax on supplemental wages when an employee's year-to-date supplemental wages are $1,000,000.00 or less, use the Optional Flat Rate Method percentage 22% multiplied times the taxable supplemental wages.

An employee earns $15.00 per hour, works a 40-hour workweek, and receives no other compensation. Calculate the social security and Medicare taxes withheld from the employee's weekly paycheck.

$45.90

Using the Wage-Bracket Method, calculate the federal income tax withholding, based on the following information. An employee earns $1,320.00 semimonthly and claims married with 2 allowance(s) on her 2019 Form W-4.

$46.00

An employee who is not supporting another family has $800.00 of disposable earnings. The employee is more than 12 weeks in arrears with child support payments. Calculate the maximum amount that can be deducted from the employee's pay for child support.

$520.00

An employee died in March with YTD wages of $45,000.00 and was owed $800.00 for a bonus. Calculate any federal income, social security, and Medicare taxes that must be withheld, if any, from the bonus payment to the deceased employee's estate if the bonus is paid in June of the year of the employee's death.

$61.20

An employee who is not supporting another family has $1,000.00 of disposable earnings. The employee is more than 12 weeks in arrears with child support payments. Calculate the maximum amount that can be deducted from the employee's pay for child support.

$650.00

Under the FLSA, the minimum weekly salary an exempt executive can be paid is:

$684.00 weekly.

Calculate an employee's net pay based on the following information: Paid biweekly Salary = $250,000.00 annually Exempt employee Hours worked week 1 = 45 Hours worked week 2 = 40 2021 W-4 information = Married filing jointly, Step 3 = $8,000 (4 qualified children under age 17) YTD Wages = $197,000.00 YTD 401(k) = $9,850.00 401(k) contribution = 5% of wages Use the Percentage method and Worksheet 4 from Publication 15-T

$7,742.65

During an employee's relocation-related move, the employee submitted an expense report to the employer in the amount of $707.20. Detailed on the expense report were $220.00 for hotel rooms for two nights, $70.00 in meals, and $417.20 for driving 745 miles. Calculate the taxable amount of the employee's moving expenses.

$707.20

An employee earns $811.00 semimonthly. Deductions include $13.00 for federal income tax, $62.04 for social security and Medicare taxes, and $15.00 in union dues. Calculate the employee's semimonthly disposable pay for a child support order.

$735.96

An employee earns $1,000.00 biweekly and receives no other compensation. Calculate the social security and Medicare taxes withheld from the employee's biweekly paycheck.

$76.50

An employee earns $876.00 semimonthly. The employee's deductions include $19.00 for federal income tax, $67.01 for social security and Medicare taxes, $210.00 for court-ordered child support payments, and $44.00 for a state tax levy. Calculate the employee's semimonthly disposable pay for the creditor garnishment.

$789.99

An employee earns $2,200.00 per month and defers 5% to a 401(k) plan. The employee is paid semimonthly. Calculate any federal taxes that must be withheld from the employee's 401(k) deferral each month.

$8.41 Under IRS rules, employee contributions to a 401(k) plan are not subject to income tax but are subject to social security (6.2%) and Medicare (1.45%) taxes.

An employee is paid $1,000.00 semimonthly. Shortly after payday, the employee is to receive a bonus of $800.00. The employee claims married, 2 allowances on a 2019 Form W-4. Using the Wage Bracket Method and the Aggregate Method, calculate the employee's federal income tax withholding on the bonus payment.

$81.00

A company has received a child support order for an employee earning $936.00 semimonthly. Deductions include $25.00 for federal income tax, $71.60 for social security and Medicare taxes, $30.00 for a creditor garnishment, and $25.00 in insurance premiums. Calculate the employee's semimonthly disposable pay.

$839.40

A nonexempt employee earns $17.00 per hour. The employee worked 47 hours during the week. Calculate the employee's gross pay for the week.

$858.50

A nonexempt employee earns $15.00 per hour. Last week, the employee earned a production bonus of $45.00 and worked 50 hours. Calculate the employee's gross pay for the week.

$874.50

An employee earns $990.00 semimonthly. Deductions include $31.00 for federal income tax, $75.74 for social security and Medicare taxes, and $100.00 for court-ordered child support payments. Calculate the employee's semimonthly disposable pay.

$883.27 Disposable earnings are determined by subtracting all deductions required by law from an employee's gross earnings. Deductions required by law include federal income, state income, local income, social security and Medicare taxes (no child support)

An employee earns $870.00 semimonthly and with this paycheck receives a $150.00 production bonus. Deductions include $52.00 for federal income tax, $78.03 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.

$889.97

An employee earns $13,461.82 per month, is paid semimonthly, and has been employed all year. Calculate the social security and Medicare taxes withheld from the employee's first paycheck in December.

$97.60

An employee earns $1,015.00 semimonthly plus a $100.00 production bonus. Deductions include $55.00 for federal income tax, $85.30 for social security and Medicare taxes, $125.00 for a court-ordered child support, and $25.00 for union dues. Calculate the employee's disposable pay for a creditor garnishment.

$974.70 Under the CCPA, disposable earnings are determined by subtracting all deductions required by law from an employee's gross earnings. Deductions required by law include federal, state, and local income taxes, and social security and Medicare taxes.

Under the FLSA, calculate a nonexempt employee's regular rate of pay for a workweek when the employee is paid $3.00 for each item produced, produces 200 items, and works 45 hours.

13.33 $3.00 * 200 = $600.00600.00/ 45 = $13.33

An employer receives a federal tax levy in the amount of $10,000.00 for an employee. The employee is paid $650.00 weekly. The employee's deductions in place when the levy is received are $123.73 for federal taxes and $30.00 for a creditor garnishment. The employee returns Part 3 of Form 668W indicating single with 1 dependent(s). Calculate the amount, if any, to be deducted per pay to satisfy the levy

180.88

What is an employee's Medicare tax rate on Medicare taxable wages in excess of $200,000.00?

2.35%

What is backup withholding?

24% FITW on reportable non-payroll payments when a TIN is not provided or the organization is notified by the IRS. It's reported annually on Form 945

Under IRS regulations, how many years must copies of an employer's tax returns be retained?

4 years

What type of financial services qualify as excludable employer-provided retirement advice?

401(k) investment advice

An employer that pays all of its state unemployment taxes in a timely manner and is not in a credit reduction state may be entitled to a credit on its federal unemployment tax return of:

5.4%.

A nonexempt employee earns $13.00 per hour. The employee worked 43 hours during the week. Calculate the employee's gross pay for the week.

578.50

During 2021, an employee drove a company vehicle 6,900 miles for personal use. Using the cents-per-mile method, calculate the value of the employee's personal use of the company vehicle.

6900 * 0.56 $3864.00

An employee has year-to-date wages of $160,800.00 and year-to-date supplemental wages of $25,000.00 with no state or local withholding taxes. What percentage is used to calculate the net amount of a grossed up bonus?

76.55%

Federal income tax withheld reported on Forms W-2 must reconcile with federal income tax withheld reported on Forms:

941

When an employee has a legal name change, what does the IRS suggest the employer see before reporting the new name on Form W-2?

A corrected social security card

Which of the following workers is an independent contractor?

A lecturer paid a percentage of the proceeds

What journal entries are required to record $250,000.00 in salaries earned during the last week of July but not paid until the first Friday in August?

Debit accrued salary expense; credit accrued salary payable

During the current year, an employee repays wages paid in a prior year. The payroll department should:

Advise the employee of the amount of repayments made during the year.

A journal consists of:

Debits and credits to specific ledger accounts.

Form 941-X is filed:

Alone when claiming a refund or owing additional taxes.

Under the FLSA, in which of the following situations must a nonexempt employee be paid an overtime premium for a Sunday to Saturday workweek?

An employee worked 8 hours on Monday, 8 hours on Tuesday, 10 hours on Wednesday, 12 hours on Thursday, and 5 hours on Friday.

Workweek

Any consecutive seven-day period.

An important communication step in resolving a late direct deposit is to:

Assure the employees their monies are safe.

Which of the following documents must be retained for at least two years?

Billing records

Which of the following statements is true regarding master file data?

Both federal and state regulations require employers to keep employees' basic employment and earnings records.

A monthly depositor deposits its payroll tax liability:

By the 15th day of the following month.

A company is a monthly depositor. On payday, the company accumulates a payroll tax liability of $101,000.00. The payroll tax deposit must be made for this liability:

By the next business day

The payroll tax deposit due date falls on a nonbusiness day. A monthly depositor must deposit its payroll tax liability:

By the next business day.

A company recorded $52,543.00 of accrued payroll taxes. When the amount is deposited, the $52,543.00 liability will be offset by posting it as a debit in the payroll tax liability account and as a credit item in the payroll:

Cash account.

Form W-4

Employee's Withholding Certificate, is used by employees to provide their employer their name, address, SSN, marital status, and adjustments. It may also indicate exempt status

Which of the following statements regarding terminated employees is true?

Employers must provide Form W-2 within 30 days of receiving a written request.

An employee has elected to have $200.00 per month contributed to a dependent care flexible spending account. At the end of the plan's grace period, $100.00 remains unused in the account. What happens to the $100.00?

The amount is forfeited

Noncash fringe benefits included in gross income are valued at the:

Fair market value

Which of the following federal taxes, if any, must an employer withhold from an employee's tips when the amount reported exceeds $20.00 in the month?

Federal income, social security, and Medicare taxes

The shortfall make-up deposit must be made for a semiweekly depositor by the:

First Wednesday or Friday on or after the 15th of the next month or due date of the return, whichever is earliest.

A 15-year-old employee works part-time while school is in session. Under the FLSA, which of the following hours can the employee work?

From 4:00 p.m. to 7:00 p.m.

The Debt Collection Improvement Act (DCIA) authorizes federal agencies to:

Garnish an employee's wages without a court order for delinquent nontax debt owed to the United States.

What's excluded in the calculation for the regular rate of pay?

Gifts, reimbursed expenses, paid time off, stock options, discretionary bonuses, and over time premiums in excess of the premium required by the FLSA

What is the definition of disposable earnings for creditor garnishments?

Gross wages less all deductions required by law

Under FSA rules, the uniform coverage provision only applies to a(an):

Health care plan.

Which government entities use Form W-2 to track information?

IRS and SSA

A Taxpayer Identification Number and name reported on Form 1099-NEC can be checked by using the:

IRS's TIN Matching System

(T/F) Employers reporting more than $50,000.00 in payroll taxes during the lookback period are semiweekly depositors.

True

If an employee's spouse dies, the employee must submit an amended Form W-4 by:

January 1 of the following year.

On June 1, an employee submitted an amended Form W-4 claiming an additional qualified child. Pay dates are June 12, June 26, July 10, and July 24, with pay periods ending 5 days prior. Since the employee submitted the new Form W-4 on June 1, the change must be implemented by:

July 10

When a company has always made timely tax deposits, its first quarter Form 941 is due on or before:

May 10

An employer contributes $350.00 per month to each employee's Sec. 125 plan for medical benefits. An employee, who has other medical coverage, chooses to receive the monthly contribution in cash. What are the implications for the employee receiving the cash?

The $350.00 is taxable income when received.

When a $75,000.00 tax liability in a deposit period covers multiple quarters, it requires:

Multiple deposits

What organization defines the data to be provided when electronically transferring an employee's pay into the employee's bank account?

NACHA

On Form 941, Schedule B, deposits are:

Not reported.

An employee drove a company vehicle 5,000 miles for business and 6,000 miles for personal use. The car is valued at $52,950.00. Which of the following statements regarding the employee's use of this vehicle is true?

Of the safe-harbor methods, the employer must use the annual lease value method to report the value of the employee's personal use of the vehicle.

A company consistently makes timely tax deposits. The deadline for filing its first quarter tax return, May 10, falls on a Saturday. When is Form 941 due?

On Monday, May 12

Under the FLSA, which of the following types of pay are employers required to pay nonexempt production employees working more than 40 hours in a week on the night shift?

Overtime premium

A company deposited the $100,000.00 it owed in payroll taxes four days after the due date. The company may be subject to:

Penalties for late deposit.

A company has 2,000 employees. The company filed its 2020 Forms W-2 electronically with the SSA on May 15, 2021. The company is subject to:

Penalties for not filing in a timely manner.

FUTA taxes over $500.00 must be deposited:

Quarterly

If an employer's cumulative FUTA tax liability is more than $500.00, when must the tax be deposited?

Quarterly

Form 843 is used to:

Request an abatement of assessed interest and penalties.

What is SSNVS?

Social security number verification service is SSA's system that allows employers to verify if an employee's name and SSN match SSA'S records

A company's cafeteria plan provides each employee with $200.00 per month to pay for chosen benefits. After selecting benefits, one employee has $50.00 per month left and requests a payment of $50.00 per month. This $50.00 is:

Taxable compensation for all federal taxes.

An employer contributes $350.00 per month to each employee's Sec. 125 medical plan. An employee elects to receive the $350.00 per month in cash since the spouse's employer offers an excellent medical plan. What are the implications of taking the $350.00 in cash?

The $350.00 is taxable income when received

A monthly depositor's shortfall make-up deposit must be made no later than:

The due date of Form 941 for the quarter.

For a dependent care FSA, an employee has elected to defer $2,500 for the plan year. Within six months, the employee has incurred $2,700 in qualified expenses. What occurs?

The employer may only reimburse the employee up to the amount contributed in premiums.

How are deposits listed on Form 941, Schedule B, if at all?

They are not listed.

Which of the following payroll issues is ONLY governed by state agencies? a. Timing of final payment to a terminated employee b. Overtime c. Exempt or nonexempt employee status d. Child labor

Timing of final payment to a terminated employee

When would an employee have negative net pay?

Total deductions exceed gross wages

Form 940, Part 2, Line 3, Total Payments to all employees reports what type of wages?

Total payments

(T/F) 401(k) plan deferrals are not subject to federal income tax when deferred.

True

A semiweekly depositor's shortfall make-up deposit is made:

Using EFTPS.

The first step in resolving a late direct deposit is to:

Verify the account and routing number.

To claim the number of allowances used in calculating federal income tax withholding from a qualified pension plan distribution, a pensioner must file Form:

W-4P

An employee had $300.00 deducted for a medical flexible spending account during the plan year. In November, the employee was terminated and $100.00 remained in the account. When must the employer reimburse the $100.00 to the employee?

When $100.00 of qualified expenses are substantiated

Which of the following statements is true regarding 401(k) plans? a. 401(k) plan deferrals are not subject to federal income tax when deferred. b. 401(k) plans must allow eligible employees to contribute up to 15% of their wages. c. 401(k) plans are designed primarily for employees of tax-exempt organizations. d. Employee deferrals to 401(k) plans are not subject to social security and Medicare tax withholding.

a. 401(k) plan deferrals are not subject to federal income tax when deferred.

Which of the following workers is classified as an employee? a. A clerk working evenings until the company can find a replacement b. A lecturer paid a percentage of the money collected at fund raisers c. A commercial artist furnishing her own tools and equipment d. A lawyer retained on a project-by-project basis

a. A clerk working evenings until the company can find a replacement

Which of the following workers is classified as a nonexempt employee? a. A laboratory assistant responsible for duties that are reviewed by the supervisor b. A salesperson soliciting orders at the clients' locations c. An executive assistant earning $784.00 a week exercising discretion while performing duties d. An electrical engineer earning $1,254.00 a week designing computer software systems

a. A laboratory assistant responsible for duties that are reviewed by the supervisor

Which of the following amounts is used when calculating an employee's gross-up? a. Desired net pay b. Disposable income c. Taxable income d. Gross income

a. Desired net pay

Which of the following items of information is required to correctly calculate federal income tax withholding? a. Filing status b. After-tax deductions c. Take-home pay d. Tax levies in effect

a. Filing status

Which of the following statements is true regarding 401(k) plans? a. In 2021, the maximum 401(k) deferral for employees under 50 years of age to a 401(k) plan is $19,500.00. b. Employers must match employee 401(k) deferrals. c. Employee deferrals to a 401(k) plan are not subject to social security and Medicare taxes. d. 401(k) plans must allow eligible employees to defer up to 15% of their wages.

a. In 2021, the maximum 401(k) deferral for employees under 50 years of age to a 401(k) plan is $19,500.00.

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

a. Record of employee's hours worked each week

Which of the following statements is true regarding payroll tax deposits? a. When the accumulated tax liability reaches $100,000.00 or more on any day within a deposit period, it must be deposited by the next business day. b. Monthly depositors with accumulated payroll taxes over $3,000.00 for a month can deposit the taxes due with their quarterly tax return. c. Semiweekly depositors with tax liabilities incurred on a Saturday or Sunday must deposit the liability by the following Wednesday. d. A monthly depositor must deposit tax liabilities by the last day of the following month.

a. When the accumulated tax liability reaches $100,000.00 or more on any day within a deposit period, it must be deposited by the next business day.

A payroll staff member responds to an employee's request for information by saying that he does not know the answer but will look it up and get back to the employee. This is an example of the customer service principle of: a. assurance b. empathy c. responsiveness d. reliability

a. assurance

A company recorded $52,543.00 of accrued payroll taxes. When the amount is deposited, the $52,543.00 liability will be offset by posting it as a debit in the payroll tax liability account and as a credit item in the payroll: a. cash account. b. tax expense account. c. tax liability account. d. expense account.

a. cash account.

When recording tax liabilities on Form 941, monthly depositors: a. check the monthly box and enter each month's liability on Line 16. b. only enter each month's liability on Line 16. c. complete Schedule B. d. are not required to make any special entries.

a. check the monthly box and enter each month's liability on Line 16.

All of the following benefits are taxable EXCEPT: a. company-paid transit pass valued at $50.00 per month. b. company-paid premiums for $100,000.00 in employee group-term life insurance. c. the personal use of a company car. d. reimbursements for meal expenses incurred during relocation.

a. company-paid transit pass valued at $50.00 per month.

All of the following provisions are a part of the Fair Labor Standards Act EXCEPT: a. eligibility for employment in the U.S. b. classification of exempt or nonexempt employees. c. minimum wage. d. overtime provisions.

a. eligibility for employment in the U.S.

All of the following characteristics are objectives of the payroll department EXCEPT: a. employees should only be concerned about themselves. b. the manager sets the tone for the success of the group. c. nothing short of perfect is acceptable. d. quality work is a state of mind.

a. employees should only be concerned about themselves

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

a. gross wages less deductions required by law.

When batching data, all of the following actions occur EXCEPT: a. immediate update of data entered. b. grouping similar data. c. developing totals. d. comparing totals.

a. immediate update of data entered.

All of the following types of compensation are taxable EXCEPT: a. qualified employee discounts. b. backpay awards. c. personal use of company vehicle. d. prize in company-sponsored sales contest.

a. qualified employee discounts.

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. by company attorneys to ensure that practices are in compliance with the law. d. with a priority on confidentially so that only payroll personnel can understand.

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

All of the following types of compensation are included in the calculation of a nonexempt employee's regular rate of pay EXCEPT: a. stock appreciation rights. b. room and board. c. nondiscretionary bonuses. d. retroactive pay.

a. stock appreciation rights.

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

a. taxable wages

If an employer's total tax liability for the lookback period is $48,000.00, the withheld taxes must be deposited no later than: a. the 15th day of the following month. b. the due date of Form 941. c. Wednesday or Friday under the semiweekly rules. d. the next business day.

a. the 15th day of the following month.

All of the following benefits are taxable EXCEPT: a. the cost of moving household goods for a member of the Armed Forces. b. employer-paid premiums for $100,000.00 of employee group-term life insurance coverage. c. reimbursements for meal expenses incurred during a d. qualified relocation. the personal use of a company car.

a. the cost of moving household goods for a member of the Armed Forces.

How does imputed income impact an employee's net pay? a. It increases the pay by the imputed income b. It decreases the net pay by the additional taxes c. It increases the pay by the taxes paid by the employer d. It decreases the taxes by the imputed income

b. It decreases the net pay by the additional taxes

Which of the following journal entries is posted as a debit? a. $15,000.00 withheld taxes, posted to the liability account b. $1,000.00 lease payment for payroll software, posted to the expense account c. $6,000.00 deducted for medical insurance premiums, posted to the liability account d. $8,000.00 manual check, posted to the asset account

b. $1,000.00 lease payment for payroll software, posted to the expense account

Which of the following journal entries is posted as a debit? a. $45,000.00 payroll checks issued to employees, posted to the payroll checking account b. $10,000.00 gross payroll, posted to the expense account c. $55,000.00 payroll tax liability, posted to the liability account d. $15,000.00 withheld taxes, posted to the liability account

b. $10,000.00 gross payroll, posted to the expense account

Which of the following journal entries is posted as a debit? a. $55,000.00 payroll tax liability, posted to the liability account b. $250,000.00 deposit, posted to the payroll checking account c. $6,000.00 deducted for medical insurance premiums, posted to the liability account d. $45,000.00 payroll checks issued to employees, posted to the payroll checking account

b. $250,000.00 deposit, posted to the payroll checking account

Which of the following journal entries is posted as a debit? a.$6,000.00 deducted for medical insurance premiums, posted to the liability account b. $250,000.00 deposit, posted to the payroll checking account c. $55,000.00 payroll tax liability, posted to the liability account d. $45,000.00 payroll checks issued to employees, posted to the payroll checking account

b. $250,000.00 deposit, posted to the payroll checking account

Which of the following workers is classified as a nonexempt employee? a. An electrical engineer earning $1,384.00 a week designing computer software systems b. A laboratory assistant responsible for duties that are reviewed by the supervisor c. An executive assistant earning $924.00 a week exercising discretion while performing duties d. A salesperson soliciting orders at the clients' locations

b. A laboratory assistant responsible for duties that are reviewed by the supervisor

Which of the following workers is an independent contractor? a. An executive secretary earning a $117,432.00 annual salary b. A marketing consultant contracted to conduct an employee/customer satisfaction study c. A free-lance copywriter required to work on-site and comply with the company's policies d. A former employee rehired after retirement to complete a task begun before retirement

b. A marketing consultant contracted to conduct an employee/customer satisfaction study

If a monthly depositor pays 98% of its tax liability timely, when must the remaining balance be paid? a. By the end of the month b. By the due date of the quarterly return c. Within three business days d. By the first Wednesday or Friday, whichever is earlier, after the 15th day of the following month

b. By the due date of the quarterly return

Which of the following amounts is used when calculating an employee's gross-up? a. Taxable income b. Desired net pay c. Gross income d. Disposable income

b. Desired net pay

Which of the following actions is an example of a payroll department demonstrating the customer service principle of reliability? a. Holding educational meetings for employees when instituting direct deposit of paychecks. b. Distributing Forms W-2 for the previous year to employees by January 31. c. Maintaining the physical appearance of the payroll department. d. Distributing Forms W-2 that have been incorrectly completed.

b. Distributing Forms W-2 for the previous year to employees by January 31.

Under the FLSA, which of the following documents must be retained for at least two years? a. Collective bargaining agreements b. Employees' work time schedules c. Record of employees' hours worked each week d. Record of employees' occupations

b. Employees' work time schedules

Which of the following regulations is governed by both the state and the federal governments? a. Breaks b. Exempt/nonexempt status c. Final pay to a terminated employee d. Method of payment

b. Exempt/nonexempt status

Which of the following statements is true regarding involuntary wage attachments? a. Garnishment deductions are only 20% of disposable pay by federal law. b. Federal tax levies continue until the deduction is released by the IRS. c. The priority on wage attachments is (1) child support, (2) creditor garnishment, and (3) federal tax levy. d. Voluntary deductions are used to calculate the employee's disposable pay.

b. Federal tax levies continue until the deduction is released by the IRS.

Which form is used when correcting Form 941, Line 2, Wages, tips, and other compensation? a. Form 843 b. Form 941-X c. Form 943 d. Form 944

b. Form 941-X

An employee has elected to have $200.00 per month contributed to a medical flexible spending account. At the end of the plan year's grace period, $100.00 remains in the account. What happens to the $100.00? a. The amount becomes taxable income b. The amount is forfeited by the employee c. The amount can be carried over to the next plan year without amending the plan d. The amount can be received in cash without taxation

b. The amount is forfeited by the employee

Which of the following statements is true regarding Sec. 125 plans? a. Benefits in the plan must include group-term life insurance, medical/dental coverage, employee discounts, and scholarship grants. b. The benefit options must include both cash and qualified nontaxable benefits. c. At the end of the plan year, employees receive cash payments for remaining unreimbursed amounts. d. Any benefits received in cash are not taxable.

b. The benefit options must include both cash and qualified nontaxable benefits.

To request federal income tax withholding from third-party sick pay, an employee must submit Form: a. W-4P b. W-4S c. W-4V d. W-9

b. W-4S

In a chart of accounts, the most important identifier is the: a. account name. b. account number. c. combination of account name and number. d. type of account indicator

b. account number.

The repayment of overpaid wages by an employee impacts: a. end-of-month balances. b. accounting and tax records. c. electronic funds transfers. d. monthly totals of the payroll register.

b. accounting and tax records.

All of the following changes to the Income Withholding Order (IWO) are acceptable EXCEPT: a. changes to the font. b. alterations to the format. c. addition of state-specific information. d. changes to the pagination.

b. alterations to the format.

The payment of a creditor garnishment withheld from an employee's wages will: a. increase both assets and liabilities. b. decrease both assets and liabilities. c. increase assets and decrease liabilities. d. decrease assets and increase liabilities.

b. decrease both assets and liabilities.

Qualified expenses under a Health FSA include all the following expenses EXCEPT: a. insulin. b. dietary supplements. c. over-the-counter drugs. d. menstral products.

b. dietary supplements.

Employers may use any of the following methods to withhold federal income tax from noncash benefits EXCEPT: a. optional flat rate b. employee's chosen method c. mandatory flat rate d. aggregate

b. employee's chosen method

All of the following benefits are taxable fringe benefits EXCEPT: $15 gift card. a. $15 gift card. b. employer contributions to health plans. c. company-provided group-term life insurance in excess of $50,000.00. d. employer reimbursements for relocation-related mileage.

b. employer contributions to health plans.

All of the following actions are requirements of the common law test for determining a worker's status EXCEPT when the: a. employer furnishes tools, equipment, materials, and training. b. employer has treated the worker or similar workers as employees. c. employer determines when, where, and how to work. d. work is done personally by the worker.

b. employer has treated the worker or similar workers as employees.

A method for identifying phantom employees is: a. requiring supervisors to come to the payroll department for their staffs' checks. b. physical payouts. c. having all employees sign up for direct deposit. d. mailing all checks.

b. physical payouts

Under a Sec. 125 plan, all of the following benefits are qualified benefits EXCEPT: a. medical coverage. b. scholarship and fellowship grants. c. deferred compensation to a 401(k) plan. d. additional vacation days.

b. scholarship and fellowship grants.

During the lookback period, a company reported $90,000.00 in employment taxes. This year, the company must deposit its payroll taxes: a. by the next business day b. semiweekly c. monthly d. with Form 941

b. semiweekly

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

b. taxable wages.

What wages and benefits received by an employee are subject to federal taxes and reporting? a. All wages and benefits are taxable in all circumstances b. Only the wages and benefits listed as taxable in IRS publications c. All wages and benefits unless the Internal Code provides an exception d. Only the cash wages paid to the employee are taxable

c. All wages and benefits unless the Internal Code provides an exception

What document is matched correctly with its use? a. Cash flow statement - Report of company's net income b. Income statement - Record of company's assets, liabilities, and net worth c. Chart of accounts - Listing of all accounts by name and number d. General ledger - Chronological recording of daily business transactions

c. Chart of accounts - Listing of all accounts by name and number

What document is matched correctly with its use? a. Income statement - Record of company's assets, liabilities, and net worth b. Balance sheet - Record of business transactions by account c. Chart of accounts - Listing of all accounts by name and number d. General ledger - Chronological recording of daily business transactions

c. Chart of accounts - Listing of all accounts by name and number

An employee's income is insufficient to pay for all scheduled deductions. The deductions, received in the following order, include a $60.00 creditor garnishment, a $125.00 charitable contribution, $300.00 for child support, and a $105.00 federal tax levy. Which deduction should be taken FIRST? a. Charitable contribution b. Federal tax levy c. Child support d. Creditor garnishment

c. Child support

What is a disadvantage of EFT when compared to issuing paper checks? a. Lower cost per paycheck b. Funds are available to employees instantly c. Difficult to stop payment d. Easier to handle vacation pay

c. Difficult to stop payment

Deposits must reach the local Federal Reserve Bank by 5:00 p.m. Eastern time when using: a. EFTPS-Direct. b. EFTPS-Through a Financial Institution. c. ETA. d. direct deposit.

c. ETA.

Which of the following statements is true regarding Sec. 125 plans? a. Benefits in the plan must include group-term life insurance, medical/dental coverage, employee discounts, and scholarship grants b. At the end of the plan year, employees receive cash payments for remaining unreimbursed amounts c. Employer contributions taken as cash represent taxable compensation d. Any benefits received in cash are not taxed

c. Employer contributions taken as cash represent taxable compensation

Which of the following procedures should NOT be verified when finalizing the payroll register each pay period? a. There are no missing paychecks. b. Gross wages less deductions equals the net amount payable to employees. c. The direct deposit file has been transferred. d. The total amount of withheld social security and Medicare taxes equals the current rate for each tax times the taxable wages for the payroll period.

c. The direct deposit file has been transferred.

Under the FLSA, a nonexempt employee must be paid overtime for which of the following situations? a. The employee worked 30 hours during the week, called in sick Thursday and Friday, and received 16 hours of sick pay for the week. b. The employee worked five eight-hour shifts in a week and commutes two hours a day. c. The employee worked 10 hours on Monday, 8 hours on Tuesday, 12 hours on Wednesday, 8 hours on Friday and reported to work and remained for 4 hours on Saturday but no work was performed. d. The employee worked 10 hours on Sunday, 10 hours on Monday, 10 hours on Tuesday and 10 hours on Wednesday.

c. The employee worked 10 hours on Monday, 8 hours on Tuesday, 12 hours on Wednesday, 8 hours on Friday and reported to work and remained for 4 hours on Saturday but no work was performed.

IRS regulations define all of the following payments as supplemental payments EXCEPT: a. commission. b. bonus. c. base salary. d. retroactive pay.

c. base salary.

A semiweekly depositor pays only 98% of its tax liability by the Friday due date. The unpaid balance must be deposited: a. by the next business day. b. within three business days. c. by the first Wednesday or Friday on or after the 15th day of the next month or the due date of the return, whichever is earlier. d. by the due date of its quarterly return.

c. by the first Wednesday or Friday on or after the 15th day of the next month or the due date of the return, whichever is earlier.

On March 15, a company received a $10,000.00 bill for medical insurance premiums to be paid on March 31. Until paid, the $10,000.00 is accrued as a: a. credit in an insurance expense account. b. debit in the cash account. c. credit in an insurance liability account. d. debit in an insurance liability account.

c. credit in an insurance liability account.

Salaries earned but not yet paid in the current month must be recorded as a: a. debit to cash. b. credit to salary expense. c. debit to salary expense. d. debit to salary payable.

c. debit to salary expense.

All of the following qualified benefits can be offered under a Sec. 125 plan EXCEPT: a. medical coverage. b. dependent care. c. deferred compensation to a 457(b) plan. d. long-term disability insurance.

c. deferred compensation to a 457(b) plan.

A true statement regarding an involuntary wage attachment is: a. creditor garnishments are limited to 20% of disposable pay by federal law. b. a parent must be in arrears before withholding can be ordered for child support. c. federal tax levies continue until the obligation is released. d. voluntary deductions are used to calculate the employee's disposable pay.

c. federal tax levies continue until the obligation is released.

A semiweekly depositor with a payday on Friday and a tax liability of $60,000.00 must deposit the tax liability: a. on or before the Friday following the payday. b. on or before the 15th day of the following month after the payday. c. on or before the Wednesday following the payday. d. by the next business day following the payday.

c. on or before the Wednesday following the payday.

The customer service principle of being responsive means a payroll technician will: a. be the first to leave the office. b. be generous with praise to fellow employees. c. respond to customers promptly. d. strongly advocate employee empowerment.

c. respond to customers promptly

All of the following benefits can be offered under a Sec. 125 plan EXCEPT: a. additional vacation days. b. long-term disability insurance. c. scholarship and fellowship grants. d. deferred compensation to a 401(k) plan.

c. scholarship and fellowship grants

The primary purpose of batch controls is to: a. make filing easier. b. facilitate tax reporting. c. validate entry accuracy. d. meet unemployment requirements.

c. validate entry accuracy.

Which of the following journal entries is posted as a debit? a. $500.00 overpayment repaid by employee, posted to expense account b. $10,000.00 withheld taxes, posted to liability account c. $5,000.00 paycheck, posted to the checking account d. $1,000.00 lease payment for payroll software, posted to the expense account

d. $1,000.00 lease payment for payroll software, posted to the expense account

Which of the following journal entries is posted as a credit? a. $250,000.00 gross pay, posted to an expense account b. $500.00 stationery purchases, posted to an expense account c. $1,000.00 lease payment for payroll software, posted to the expense account d. $13,000.00 state income tax withheld, posted to the liability account

d. $13,000.00 state income tax withheld, posted to the liability account

Which of the following journal entries is posted as a debit? a. $5,000.00 state income tax withheld, posted to the liability account b. $500.00 overpayment repaid by employee, posted to expense account c. $10,000.00 withheld taxes, posted to liability account d. $5,000.00 deposited to payroll checking account, posted to asset account

d. $5,000.00 deposited to payroll checking account, posted to asset account

Which of the following journal entries is posted as a debit? a. $10,000.00 withheld taxes, posted to liability account b. $500.00 overpayment repaid by employee, posted to expense account c. $5,000.00 paycheck, posted to the checking account d. $5,000.00 purchase of calculators, posted to the asset equipment account

d. $5,000.00 purchase of calculators, posted to the asset equipment account

Which of the following journal entries is posted as a debit? a. $5,000.00 paycheck, posted to the cash account b. $15,000.00 withheld taxes, posted to the liability account c. $45,000.00 payroll checks issued to employees, posted to the payroll checking account d. $5,000.00 purchase of calculators, posted to the asset equipment account

d. $5,000.00 purchase of calculators, posted to the asset equipment account

Which of the following statements regarding FLSA requirements is true? a. An employer's workweek must coincide with the calendar week. b. Employers must pay overtime to employee's working on federal holidays. c. An employee must be paid overtime when working more than eight hours in a workday. d. A bonus paid under a union contract is included in the regular rate of pay.

d. A bonus paid under a union contract is included in the regular rate of pay.

Which of the following workers is classified as a nonexempt employee? a. A salesperson soliciting orders at the clients' locations b. A corporate attorney litigating damage suits c. A production supervisor responsible for scheduling employees and handling employee complaints d. A payroll technician inputting time cards

d. A payroll technician inputting time cards

Which of the following statements is true regarding Sec. 125 plans? a. At the end of the plan year, employees receive cash payments for remaining unreimbursed amounts. b. Benefits in the plan must include group-term life insurance, medical/dental coverage, employee discounts, and scholarship grants. c. Any benefits received in cash are not taxed. d. Employer contributions taken as cash represent taxable compensation.

d. Employer contributions taken as cash represent taxable compensation.

An employee is confused about how to complete Form W-4. The employee's spouse is self-employed. Last year they owed a large sum of income tax to the IRS. How can the payroll department help the employee? a. Consult with the employee to determine what amounts should be included on the form b. Tell the employee to claim single with no other adjustments if confused c. Complete a Form W-4 for the employee d. Encourage the employee to use the IRS Withholding Estimator

d. Encourage the employee to use the IRS Withholding Estimator

Which of the following regulations is governed by both the state and the federal governments? a. Breaks b. Method of payment c. Final pay to a terminated employee d. Exempt/nonexempt status

d. Exempt/nonexempt status

Payroll documentation should include all of the following items EXCEPT: a. payroll schedule b. database file description c. payroll procedures d. HR policies

d. HR policies

What taxes, if any, must be withheld from payments to an independent contractor? a. Federal income tax only b. Social security and Medicare taxes only c. Federal income, social security, and Medicare taxes only d. No federal employment taxes are required to be withheld

d. No federal employment taxes are required to be withheld

Which of the following transactions is posted as a credit? a. Gross pay, posted to an expense account b. A deposit to the payroll checking account, posted to the payroll checking account c. A mortgage payment, posted to the liability account d. State income tax withheld, posted to the liability account

d. State income tax withheld, posted to the liability account

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. the workweek the bonus is paid. c. all workweeks in the last 12 months. d. all workweeks during the period in which the bonus was earned.

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

All of the following benefits are taxable fringe benefits EXCEPT: a. prize in company-sponsored sales contest. b. back-pay awards. c. personal use of company vehicle. d. business use of company vehicle.

d. business use of company vehicle.

On March 15, a company received a $10,000.00 bill for medical insurance premiums to be paid on March 31. Until paid, the $10,000.00 is accrued as a: a. debit in an insurance liability account. b. credit in an insurance expense account. c. debit in the cash account. d. credit in an insurance liability account.

d. credit in an insurance liability account.

All of the following qualified benefits can be offered under a Sec. 125 plan EXCEPT: a. elective vacation days. b. adoption assistance. c. deferred compensation to a 401(k) plan. d. deferred compensation to a 403(b) plan.

d. deferred compensation to a 403(b) plan.

To convey assurance to a customer, a payroll professional should: a. get things done promptly. b. provide a benefit employees can purchase with after-tax dollars. c. have organizational skills. d. display confidence and competence

d. display confidence and competence

The shortfall make-up deposit must be made for a semiweekly depositor by the: a. end of the current month. b. end of the next month. c. end of the current quarter. d. first Wednesday or Friday on or after the 15th of the next month or due date of the return, whichever is earliest.

d. first Wednesday or Friday on or after the 15th of the next month or due date of the return, whichever is earliest

An employee who files an exempt Form W-4 in 2021 must have: a. filed an exempt Form W-4 in 2020. b. been a full-time student earning $350.00 per month and claimed as a dependent in 2020. c. filed a Form W-4 in 2020. d. had no tax liability in 2020 and expect to have no tax liability in 2021.

d. had no tax liability in 2020 and expect to have no tax liability in 2021.

IRS regulations define all of the following payments as supplemental payments EXCEPT: a. overtime pay. b. tips. c. severance. d. hourly pay.

d. hourly pay.

All of the following benefits are taxable fringe benefits EXCEPT: a. employer reimbursements for relocation-related mileage. b. company-provided group-term life insurance in excess of $50,000.00. c. $10 gift card. d. no-additional-cost services.

d. no-additional-cost services.

All the following types of records can be integrated with payroll data EXCEPT: a. benefits. b. human resources. c. personnel. d. purchasing.

d. purchasing

The frequency of paying employees is governed by the: a. FLSA b. IRS c. SSA d. state law

d. state law

If the FUTA tax liability for a quarter is $500.00 or less, the taxes must be deposited: a. by the last day of the quarter. b. by the 15th of the month following the end of the quarter. c. by the end of the month following the end of the quarter. d. with the next quarter's liability if the total liability exceeds $500.00.

d. with the next quarter's liability if the total liability exceeds $500.00.

Form 941 is used to report:

Social security wages.

A company making its federal tax deposits via EFTPS has elected to have its bank initiate the transactions. This method is defined as:

EFTPS-Through a Financial Institution.

How is a company with 538 employees required to file Forms W-2?

Electronically

In 2021, an employer had four employees. Two of the employees worked full-time and earned $42,000 each. The other two worked part-time and earned $5,590 and $3,275, respectively. The company is not eligible to receive any FUTA tax credits. The employer's FUTA tax liability is:

$1,371.90

Effective January 1, 2021, federal contractors are subject to an Executive Order requiring employees working under the federal contract to be paid a minimum wage of __________.

$10.95 per hour

On Wednesday, April 15, a semiweekly depositor paid wages and incurred an employment tax liability of $79,000. On Friday, April 17, it paid commissions incurring a tax liability of $44,000. The employer must deposit:

$123,000 on Monday, April 20.

Under the FLSA, employers may pay tipped employees, who receive $30.00 in tips during a month, at least __________ as long as the amount of the employee' tips is enough to raise the employee's regular rate of pay to the minimum wage for the workweek.

$2.13 per hour

An employee's biweekly disposable earnings are $900.00. Under the CCPA, calculate the maximum creditor garnishment deduction.

$225.00

What is the 2021 annual compensation limit for defined benefit and contribution plans?

$290,000

The opportunity wage for teenagers for newly hired employees who are under the age of 20. They may be paid this rate for the first 90 consecutive calendar days after they are hired.

$4.25 per hour

Tip credit

$5.12 per hour

The FUTA tax wage base is:

$7,000.00

The federal minimum wage since July 24, 2009

$7.25 per hour

An employee earns $2,146.27 semimonthly, claims single, 1 dependent on their returned Part 3 of Form 668-W. The IRS exempts $702.09 each pay period for a federal levy. The employee's combined withholding for federal income, social security, and Medicare taxes is $636.37. The employee has no other deductions. The employee owes $1,200.00 in back taxes. What is the maximum deduction for the federal levy each pay period?

$807.81

The Fair Labor Standards Act (FLSA) does NOT

1. Require employers to provide paid vacations, sick days, jury duty leave, holidays, lunch breaks, or coffee breaks, but some states require certain employers to provide paid sick leave to employees meeting specific requirements 2. Regulate how often employees must be paid or when they must be paid after employment termination (voluntary or involuntary) 3. Restrict the hours employees over 16 years of age may be required to work

Fair Labor Standards Act (FLSA)

1. Sets the minimum wage and overtime rates covered employees must receive for their work 2. Requires record keeping by all covered employees 3. Places restrictions on the types of work minors can do and the hours they can work 4. Mandates equal pay for equal work

What is an employer's Medicare tax rate when an employee has year-to-date Medicare wages in excess of $200,000.00?

1.45%

A nonexempt employee is provided room and board. Under the FLSA, the employee's regular rate of pay calculation includes:

100% of the fair-market value of the room and board.

Under the FLSA, what is generally the minimum age at which a minor can be employed?

14

An employee has year-to-date wages of $151,800.00 and year-to-date supplemental wages of $25,000.00 with no state or local withholding taxes. What percentage is used to calculate the net amount of a grossed up bonus?

76.55%. When an employee receives a net amount, the calculation of taxable wages requires using the gross-up formula. When grossing-up an employee's net wages, divide the desired net pay by 100% less all of the employee's tax rate percentages.

A hospital employee working under the 8/80 provision works 5 days, 8 hours a day in the first week and 4 days at 10 hours a day in the second week. Calculate the overtime hours, if any, the employee must be paid.

8 A hospital employee working under the 8/80 provision must be paid overtime for working hours over 8 in a day or 80 in the 14 day period. Even though the employee has worked 80 hours in the two week period, 8 hours of overtime is due for the four days when the employee worked more than 8 hours a day.

Under the FLSA, an employee under the age of 20 can be paid the opportunity wage for a maximum of

90 calendar days

A company is required to withhold taxes from an independent contractor when:

A TIN is not provided

Which of the following workers is classified as an employee?

A day-care worker guaranteed a minimum salary plus a percentage of the profits

Shift differential (shift premium)

An amount added to an hourly rate to compensate an employee for working an evening, a late night, or other undesirable shift. The FLSA does not require this to be paid.

Exempt Employee

An employee who is paid a salary and who does not receive overtime pay. These employees are not protected by the FLSA.

Nonexempt Employee

An employee who is paid at least the minimum wage for all hours worked. An overtime premium for hours worked over 40 in a single workweek must also be paid to these employees.

Under the FLSA, a workweek starts on:

Any day at any time.

Discretionary bonus

Bonuses paid for services performed.

The social security tax reported on Form 941 represents what taxes?

Both employee's and employer's share of social security

Which box on the 2021 Form W-2 is correctly matched with its use?

Box 12 (Code J)--Nontaxable sick pay

How, if at all, is Form 940 corrected?

By filing an amended Form 940

Engaged to be Waiting

Compensable work time because it is usually short, spent on the employer's premises, and insufficient for the employee to use for his or her own purposes.

Nondiscretionary bonus

Contractual or agreed-upon bonuses or incentives related to productive, efficiency, attendance, quality, or some other measure of performance.

An example of an amount included in the calculation of an employee's regular rate of pay.

Cost-of-living adjustments. The FLSA defines regular rate of pay as the total regular pay for all hours work divided by the hours worked in the workweek. The FLSA exempts the following types of pay from the regular rate of pay - gifts, paid time off, reimbursed expenses, discretionary bonuses, benefit plan contributions, and others.

Form SS-8

Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Contains a series of questions categorized into behavioral control, financial control, and relationship of the parties designed to determine the extent of the employer's right to control the result of the assigned work and the methods used to perform that work (employee or independent contractor).

Reasonable Basis Test (Safe Harbor Rules)

Employers may treat workers who would be employers under the common law test as independent contractors, exempt from federal employment tax laws, if they have a reasonable basis for doing so.

(T/F) Employers must report newly hired employees within 10 calendar days of the date of hire.

False. Must be within 20 calendar days of hire.

(T/F) The information an employee provides in Step 4(a) of Form W-4 is only used if the employer is using the Wage Bracket method, Worksheet 2 from Publication 15-T.

False. The amounts listed in Step 4(a) of an employee's Form W-4 is used in both the Percentage method and the Wage Bracket method for calculating federal income taxes.

When calculating a gross-up for an employee working in a state with no income tax and YTD wages of $50,000.00, the employee's desired net payment of $5,000.00 is divided by 100% less the:

Federal income, social security and Medicare tax percentages only.

Family and Medical Leave Act (FMLA)

Guarantees employees unpaid leave for the birth or adoption of children and for serious medical conditions of family members or themselves.

Which of the following plans can discriminate in favor of highly compensated employees?

Nonqualified deferred compensation plans (457(b) plans)

Form 668-W

Notice of Levy on Wages, Salary, and Other Income

A company is a monthly depositor. Its paydays are on Wednesdays. If the payroll tax liability for the month is less than $100,000.00, the company's payroll tax deposit is due:

On or before the 15th day of the following month.

During the lookback period, a company reported $90,000.00 in employment taxes. This year, how must the company deposit its payroll taxes?

Semiweekly

Under the FLSA for a Sunday to Saturday workweek, in which of the following situations must a nonexempt employee be paid an overtime premium?

Over the last two weeks, a hospital employee under an 8/80 agreement worked 70 hours which included one 10-hour shift.

Form 2159

Payroll Deduction Agreement

Form 668-D

Release of Levy/Release of Property from Levy

When managing employees' Forms W-4 the employer should

Remind employees by December 1 to submit new Forms W-4 if their anticipated filing status or income tax liability has changed. IRS regulations state an employer should remind employees by December 1 to submit new Forms W-4 if their anticipated filing status or federal income tax liability has changed.

Form W-9

Request for Taxpayer Identification Number and Certification. Used by nonemployees to provide a taxpayer identification number to the company for which the nonemployee has received a reportable payment. This form also tells the company whether the nonemployee is subject to backup withholding.

Under the FLSA, an employee is engaged to be waiting when the employer:

Restricts the employee's behavior and does not permit personal business.

Which employers must use Form 941, Schedule B?

Semiweekly depositors

(T/F) Under the FLSA, the an administrative exempt employee's primary duties must be the performance of office or nonmanual work directly related to the company's management or business operations with the duties requiring the exercise of discretion and independent judgement in matters of significance. Administrative employees not meeting the administrative exemption must be paid overtime for all hours worked over 40 in a workweek.

True

Employee

The employer has the right to control what work will be done and how that work will be done.

8/80 Rule for Hospitals and Nursing Homes

The employer must pay employees covered by the agreement or understanding at least 1 1/2 times their regular rate of pay for all hours worked over eight in a day or 80 in the 14-day period, whichever would result in a higher pay for the employee.

When making a timely and accurate deposit, a company can short its payroll tax deposit by:

The greater of 2% of the liability or $100.00.

Independent Contractor

The only control of the company is the desired results to be accomplished, and not the details by which those results are accomplished.

Common Law Test

The primary way to determine whether an individual qualifies as an employee or an independent contractor.

Imputed Income

The taxable value of noncash benefits the employee receives such as taxable group-term life insurance. Imputing income reduces an employee's net pay by increasing taxes. The employee does not receive additional pay in the form of cash.

(T/F) A 24% backup withholding tax on nonwage payments is withheld if a payee has failed to provide a Taxpayer Identification Number (TIN) or the IRS has notified the payer that the TIN is incorrect.

True

(T/F) A rehired employee must be reported when the individual has been separated from employment with the organization for at least 60 consecutive days.

True

(T/F) Employers are NOT responsible for validating the information on Form W-4 or for providing advice relating to Form W-4. An employee's Form W-4 remains valid until the employee amends the form or an exempt Form W-4 expires.

True

(T/F) If an employee submits a Form W-4 indicating the desire to have a flat dollar amount of tax withheld, the Form W-4 is not valid and MUST be rejected.

True

(T/F) If an employer is covered by both state and federal law and the two are not the same, the employer is required to pay the higher minimum wage based on the state in which the employee works.

True

(T/F) The FLSA regulates overtime requirements, minimum wage, child labor, and equal pay rules

True

An employee must complete a new Form W-4:

When the employee's filing status changes from married filing jointly to single or married filing separately.

A semiweekly depositor that has a payroll tax liability of $80,000.00 from a Thursday payroll must deposit the liability by:

Wednesday

An employee's profit sharing bonus is payable in the year following the employee's death. How should the employer tax and report the bonus?

Withhold no taxes and report the bonus amount on Form 1099-MISC, Box 3.

Under the FLSA, when determining whether a nonexempt employee is to be paid overtime, the employer uses the hours worked in a:

Workweek

All of the following life events would necessitate a new Form W-4 be filed within 10 days EXCEPT: a. no longer eligible to claim exempt. b. death of a spouse. c. a nonworking spouse takes a job. d. a legal separation.

b. death of a spouse.

All of the following items are covered by the Fair Labor Standards Act EXCEPT: a. defining equal pay for equal work. b. defining when escheat laws apply. c. setting child labor restrictions. d. setting the minimum age for work.

b. defining when escheat laws apply.

A change in the company workweek may be necessary to: a. reduce paying overtime. b. meet changing business needs. c. comply with the calendar week. d. adjust pay schedules during holidays.

b. meet changing business needs.

On Tuesday, a semiweekly depositor incurs a payroll tax liability of $80,000.00; on Wednesday, another payroll tax liability of $25,000.00 is incurred. What deposit(s) must be made? a. $105,000.00 on Thursday b. $105,000.00 on the following Wednesday c. $80,000.00 on the next Friday and $25,000 on the next Wednesday d. $105,000.00 on the next Friday

c. $80,000.00 on the next Friday and $25,000 on the next Wednesday

Under the FLSA, as of January 1, 2021, which of the following situations satisfies federal minimum wage requirements? a. An employee signs a contract agreeing to work for less than the minimum wage if the employer provides him with time off to attend college classes b. A part-time employee in shipping paid $6.75 per hour c. An employee, age 18, is paid $106.25 for working 25 hours during the first week on the job d. An employer covered under the FLSA pays a state minimum wage that is lower than the federal minimum wage

c. An employee, age 18, is paid $106.25 for working 25 hours during the first week on the job

An employee was hired in April 2021 and filed an exempt Form W-4. The employee's Form W-4 expires on: a. December 1, 2021. b. December 31, 2021. c. February 15, 2022. d. April 15, 2022.

c. February 15, 2022.

Which form is correctly matched with its use? a. Form 941--Estimated quarterly tax return b. Form 941-X--Transmittal of quarterly tax returns c. Form 945--Reporting backup withholding d. Schedule B--Backup withholding

c. Form 945--Reporting backup withholding

What is the definition of imputed income? a. Taxes withheld from the employee based on the benefits received b. Amount recorded in the general ledger system c. Taxable value of noncash benefits the employee receives d. Cash the employee is paid through the payroll system

c. Taxable value of noncash benefits the employee receives

An employee who is a full-time student is claimed as a dependent by her parents. What conditions must exist for the employee to claim exempt on Form W-4? a. Only unearned income is less than $250.00. b. Only total income is less than $900.00. c. Total income is not more than $1,100.00 including unearned income of not less than $350.00. d. There are no limits for students to claim exempt.

c. Total income is not more than $1,100.00 including unearned income of not less than $350.00.

Which of the following workers is classified as an exempt employee? a. A purchasing assistant performing clerical functions b. A payroll technician inputting timecards c. A trainee soliciting orders for the company's products d. A department manager supervising five full-time employees

d. A department manager supervising five full-time employees

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. Submit

All of the following retirement plans are subject to contribution limits EXCEPT: a. 457(b) plans. b. 403(b) plans. c. 401(k) plans. d. nonqualified deferred compensation plans

d. nonqualified deferred compensation plans

All of the following factors are used in calculating an employee's federal income tax withholding EXCEPT: a. filing status. b. Form W-4. c. pay frequency. d. regular rate of pay.

d. regular rate of pay.

An employer's responsibilities with Form W-4 include:

ensuring that Form W-4 is complete. Employers are responsible for ensuring that an employee has at least completed steps 1 and 5 of Form W-4.

These items are excluded from regular rate of pay

gifts, reimbursed expenses, pto, stock options, discretionary bonuses, and ot premiums in excess of premiums required by FLSA

Waiting to be Engaged

is NOT work time because the employee is freed from all duties and responsibilities for a definite period of time and has enough time to pursue personal business before returning to work even if the employee remains on the employer's premises, the waiting time in not work time.

A monthly depositor becomes a semi-weekly depositor in all of the following situations EXCEPT when the:

liability in a deposit period is $50,000.00.