Payroll Ch 2
What types of records does IRS Regulation 26 CFR 1.6001 cover?
Outsourced payroll records Manual pay records Computerized pay records
Allen is an employee of the foreign subsidiary of a United States based company who lives and works in the United Kingdom. According to FATCA, how much of his wages may Allen exclude from United States' taxes, according to 2020 guidelines? Multiple Choice $47,500 $80,850 $107,600 None of the choices are correct.
$107,600
All executive compensation must be: Multiple Choice Available for inspection by any interested party. Reported with the company's financial statements. Maintained in a file and purged annually. Annotated as to derivation and benchmarks.
Annotated as to derivation and benchmarks.
An employer must have an employee complete Form W-4: Multiple Choice At the time of hire. Every January 1. Before each pay disbursement. Each year, upon the employee's anniversary with the firm.
At the time of hire.
For electronic records, which is the following is a guideline for appropriate disposition? Multiple select question. Destruction of all technical documentation Dates and authorized administrators Schedules and security encryption documentation
Dates and authorized administrators Schedules and security encryption documentation
The ------------------------------------ was originally intended to protect ATM transaction but has been expanded to address paycard fraud.
Electronic Fund Transfer Act
Which of the following are characteristics of leased employees (select all that apply)? Multiple select question. Employee actions are directed by the recipient company (i.e. the lessee). The employee is contracted to work on a part-time basis. A formal agreement exists between the employer and leasing organization.
Employee actions are directed by the recipient company (i.e. the lessee). A formal agreement exists between the employer and leasing organization.
Which of the following is true about payroll file security requirements? Multiple choice question. Access to employee pay records must be open to all personnel. Files must be secured by either physical or electronic safeguards. Paper records may be discarded in the trash at the discretion of the payroll clerk.
Files must be secured by either physical or electronic safeguards.
The ________ mandated that new hires must be reported within ________ days to state authorities. Multiple Choice Davis-Bacon Act; 28 Civil Rights Act; 25 Immigration Reform and Control Act; 20 Fair Labor Standards Act; 30 Incorrect
Immigration Reform and Control Act; 20
Which of the following is a purpose of new hire reporting?
Immigration agency tracking Child support obligations tracking COBRA benefits administration
Well-designed internal controls promote:
Legal compliance and file integrity. Protection against embezzlement. Audit trail support.
What is the federal regulation for the time that a resigned employee's final pay should be issued? Multiple choice question. Within two weeks Immediately No regulation exists At the next payroll period
No regulation exists
Ibrahim is the payroll accountant for a firm. He notes that the firm has hired a new employee. What forms must he collect from the new employee? Multiple Choice W-2 and I-9 W-4 and I-9 W-3 and I-9 W-4 and I-8
W-4 and I-9
Which of the following records maintenance issues was not addressed by IRS Revenue procedure 98-25, 1998-1 CB 689? Multiple choice question. Pay dates Time worked Employee status Record reconciliation Work quality
Work quality
Errors and potential corruption in the payroll process may be minimized by ---------------- and -------------- duties.
cross training , alternating or rotating
FATCA enforcement has been difficult because the Internal Revenue Service relies on ________ for reporting purposes. rev: 02_12_2021_QC_CS-252947 Multiple Choice foreign countries intermediaries (e.g., banks) employers and employees personal income tax returns
employers and employees
What information about an employee would be supplied by the payroll accountant? Multiple select question. local jurisdiction state of employment supervisor's work schedule worker's compensation classification
local jurisdiction state of employment worker's compensation classification
An important element of a payroll process is the determination of authorized signers
review
A good practice is to obtain -------------------on all employee overtime.
supervisor approval
Under the--------------------------------------- , certain items are required in every employee's file.
Blank 1: Fair or F Blank 2: Labor or L Blank 3: Standards, S, or Standard Blank 4: Act or A
An important element of a payroll review process is the determination of
Blank 1: authorized Blank 2: signers
Details of the website's and documentation must be maintained to facilitated record disposal
Blank 1: design Blank 2: system Blank 3: change
According to IRS Revenue Procedure 98-25, 1998-1 CB 689, a company must maintain records about how--------------------was derived, including --------------------- from similar companies.
Blank 1: executive or executive's Blank 2: pay Blank 3: benchmarks
Georgeanne works in a company for which her primary job function is the sale of company products to consumers. She receives a percentage of each sale as part of her compensation. Her compensation contains a ________ element. Multiple Choice Piece-rate Nonexempt Pay-for-performance Commission
Commission
List the purposes for new hire reporting Multiple select question. Communication of professional violations Administration of COBRA benefits Updating of the Department of Labor database Immigration agency records Tracking of employees for IRS purposes Child support tracking
Communication of professional violations Administration of COBRA benefits Immigration agency records Child support tracking
If a firm pays its employees biweekly, how often does it disburse employee compensation? Multiple Choice Every two weeks Every three weeks Every week Twice per week
Every two weeks
What is the distinction that applies to exempt employees? Multiple choice question. Exempt employees may only work eight hours on any given day. Exempt employees are not subject to certain FLSA provisions. Exempt employees are not subject to many federal laws.
Exempt employees are not subject to certain FLSA provisions.
A company should restrict access to payroll files (paper and/or electronic) as a part of ________. Multiple Choice Audit trail requirements File security internal controls Compliance with company policy FATCA requirements
File security internal controls
Geoff is the payroll clerk for a firm that maintains its payroll through computerized records on a centralized server. One of his responsibilities is employee file maintenance, including the destruction of records after the retention time has elapsed. His method of purging employee records is to delete the file from the database. What other record destruction procedures should Geoff follow? Multiple Choice He should check all other employees' computers to ensure that the record is deleted. None. His method is acceptable. He should send an interoffice request to have someone in the information technology department remove the record from the server. He should purge the record from the server.
He should purge the record from the server.
Upon termination, which of the following must be included in an employee's final pay? Multiple Choice Hours worked. Vacation previously paid. Sick time accrued but not used. Severance pay.
Hours worked.
Which forms are required to new hire reporting? Multiple select question. SS-4 I-9 W-2 W-4
I-9 W-4
What forms are required when an employee is hired?
I-9 , W-4
Why should an employer make payroll a non-solo enterprise? Multiple select question. Identification of non-existent or ghost employees Micromanagement of employees Prevent diversion of funds
Identification of non-existent or ghost employees Prevent diversion of funds
Which of the following is a purpose of overtime review? Multiple select question. Improper pay can erode employee morale Prevention of payroll errors Avoidance of wage approval
Improper pay can erode employee morale Prevention of payroll errors
In the event of fraudulent activity, what is the retention period for documents? Multiple choice question. 7 years 5 years 3 years Indefinite
Indefinite
Mako was an employee of the Jaeger Corporation. After she voluntarily terminated employment, auditors discovered evidence of fraudulent activity that they traced to her. Mako's records must be retained: Multiple Choice Indefinitely. For 80 years. For 10 years. For 100 years.
Indefinitely
Individuals classified as ________ are processed as vendors of a firm. Multiple Choice Independent contractors Nonexempt employees Exempt employees Government contract employees
Independent contractors
Which of the following is true about independent contractors? (Check all that apply). Multiple select question. Independent contractors are not considered employees. Payroll legislation applies to independent contractors. Independent contractors control the manner in which they complete their work. The firm provides the tools that the independent contractor needs.
Independent contractors are not considered employees. Independent contractors control the manner in which they complete their work.
What are errors that can result if the total payroll responsibility rests with one person? Multiple select question. Nonexistent or "ghost" employees could be created and paid via the payroll system. Management manipulation of employee commissions or incentives Accuracy of payroll in all aspects Terminated employees may continue to be paid
Nonexistent or "ghost" employees could be created and paid via the payroll system. Management manipulation of employee commissions or incentives Terminated employees may continue to be paid
Which of the following is a purpose for the use of leave forms? Multiple choice question. Paper trail to clarify discrepancies. Additional paperwork for employees to maintain. Managerial oversight to prevent overwork.
Paper trail to clarify discrepancies.
Stan works for a bakery for which part of his compensation is based on the decoration of wedding and other specialty cakes. His compensation has a ________ element. Multiple Choice Piece-rate Nonexempt Performance incentive Commission
Piece-rate
Which of the following are reasons for payroll file security? Multiple select question. Prevention of fraud activity Personnel file integrity Avoidance of audit access Access to tax information
Prevention of fraud activity Personnel file integrity Access to tax information
Which of the following items are not required in every employee's payroll file? Multiple choice question. Regular hourly pay rate or salary Previous year's year-to-date earnings Date of payment and the pay period covered
Previous year's year-to-date earnings
Why is document destruction a serious concern for payroll records? Multiple choice question. Environmental concerns Protection of confidential data Company storage issues
Protection of confidential data
Which of the following items are required in every employee's payroll file? Multiple select question. Regular hourly pay rate Employee's full name Last evaluation date Children's names (when applicable)
Regular hourly pay rate Employee's full name
Which items must be considered when issuing an employee's final paycheck? Multiple select question. Child or other dependent care Regular pay Sick or vacation pay Overtime pay Insurance deductibles
Regular pay Sick or vacation pay Overtime pay
Outsourcing the payroll process: Multiple Choice Relieves the company of the review process but not the task completion. Relieves the company of certain task completion but not the review process. Relieves the company of the task completion and the review process. Relieves the company of all liability for payroll completion and accuracy.
Relieves the company of certain task completion but not the review process
What is the difference between termination and resignation, as far as final pay is concerned? Multiple Choice Resignation and termination pay are subject to state regulations. Resignation pay must be paid within one week and termination pay must be the next business day. Resignation pay must be paid on the next business day and termination pay is due immediately. Resignation pay may be paid at the next regular pay date, but termination pay is subject to state law.
Resignation pay may be paid at the next regular pay date, but termination pay is subject to state law.
Which pay frequency has 24 pay periods annually? Multiple Choice Semimonthly Semi-weekly Weekly Biweekly
Semimonthly
A firm needs to destroy paper payroll records after the end of the retention period. Which of the following is an option for destruction purposes?
Shredding Burning Pulping
What parties may legally set laws regarding document retention? Multiple select question. State Government Federal Government Unions Negotiators
State Government Federal Government
A payroll review process increases in complexity when: Multiple Choice The company has multiple departments and many employees. The company is not geographically dispersed. The company is centralized and uses one location. The company has few departments and few employees.
The company has multiple departments and many employees.
A temporary employee's actions are directed by: Multiple choice question. The employment agency The employer Either the employer or the agency
The employment agency
Which of the following is subject to overtime in the process of hourly computations, according to FLSA? Multiple Choice Time worked in excess of eight hours per day Holiday, sick time, and paid time off Nonexempt employee weekend work Time worked in excess of 40 hours per week
Time worked in excess of 40 hours per week
Which of the following is/are purpose(s) of new hire reporting laws?
To keep track of workers and professionals who are subject to licensing regulations. To ensure that the employee may legally work in the United States. To ensure payment of court-ordered obligations like garnishments and child support.
Why must employee time be verified? Multiple choice question. Accuracy in time collection is less significant than paying employees. To promote accuracy in employee pay.
To promote accuracy in employee pay.
True or false: Overpay and underpay can occur with either manual or electronic time collection. True false question. True False
True
Accounting software that allows payroll preparation must include--------------- .
password requirements
Alternation of duties and cross-training of personnel is similar to the goals of the
Blank 1: Sarbanes or Sarbanes- Blank 2: Oxley Blank 3: Act
Salaried workers may be classified as either---------
Blank 1: exempt Blank 2: nonexempt
Preferred methods of document destruction include , , and .
Blank 1: incineration Blank 2: shredding Blank 3: pulping
Pay record documentation may include reports of
Blank 1: tardiness or lateness Blank 2: absenteeism or absence
Pay record documentation may include reports of-------
Blank 1: tardiness or lateness Blank 2: absenteeism or absence
Which of the following are usually part of establishing a new employee's record in an automated system? Multiple select question. W-4 information Wage base Job classification Coworkers W-2 information Employee entry form
W-4 information Wage base Job classification Employee entry form
Control of time away from work is the responsibility of the--------------- , at the very minimum.
employee's supervisor