Which of the following features is LEAST likely to be considered when looking at the security of a new payroll system?

a) regular data back-up and storage

b) protection against computer viruses

c) limited system access

d) system edits

D - System Edits

12.5-3

Company deadlines for payroll data input documents are essential for:

a) timely processing of the payroll

b) accurate entry of data

c) guaranteeing that all information is processed

d) adequate auditing purposes

A - Timely processing of the payroll

12.5-3

An employee earn $9 and hour and an additional 10 cents per hour for hours worked after 7pm.  If an employee works from 2pm to 11pm, with an unpaid meal break from 6pm to 7pm, Monday through Friday, what is the employee's weekly gross pay under the Fair Labor Standards Act?

a) $360                   b) $361

c) $362                   d) $364

C) $362

(40x9) + (20x$.10) = $362

2.6

The BEST reason for tracking pay-related problem statistics is to enable payroll to:

a) identify root causes and take actions to prevent similar recurrances

b) apologize to clients in a more professional manner

c) direct problems to those who caused the problem

d) more resources to handle more problems

With regard to employees' reported tips, the employer must:

a) withhold and pay only the employees' portion of social security and Medicae taxes on tips

b) report taxes on tips separately when making an employment tax deposit

c) report tips as wages on Form W-2 and the pay the employer portion of social security and Medicare taxes

d) report and pay the employer portion of social security and Medicare taxes on the portion of cash tips above the Federal minimum wage

Transactions are recognized in chronological order into books of original entry called:

a) registers

b) vouchers

c) invoices

d) journals

The KEY advantage of using an automated time and attendance is that it:

a) identifies phantom employees

b) reduces errors

c) interfaces with the payroll system

d) frees supervisors from having to review hours

B)  Reduces errors

12.7

As part of the implementation of a new payroll system, all transactions from the most recent actusl payroll are processed in the new system prioe to using the system to run payrolls.  This an example of what type of testing?

a)  compliance

b)  back-up

c)  on-going

d)  parallel

D)  Parallel

12.4-5

To exhibit good customer service skills, payroll staff must understand and be able to explain:

a)  payroll forms

b)  beneits enrollment techniques

c)  system design decisions

d)  strategic departmental direction

A)  Payroll form

13.3-7

Under the FLSA, what is the compensation due an employee whose rate o pay is $8 per hour and who is paid for 52 hours during a one-week period, 8 hours of sick pay?

a) $416

b) $432

c) $448

d) $464

B)  $432

52 * $8 = $416  4*.5*$8 = $16 $416 + 16 = $432

2.6-2 

All of the following data elements are required to be maintained in the employee masterfile EXCEPT:

a) social security number

b) birth date

c) martial status

d) occuption

C)  Martial status

10.8-1

Upward communication involves:

a) dissemination of management decisions to the staff

b) interaction between you and your manager

c) passing information to management

d) conducting quality circle meetings

C)  Passing information to management

13.2-5

The fact that transactions affect two separate accounts of a business is called:

a) compound-entry accounting

b) double-entry accounting

c) accrual accounting

d) T-accounting

B)  Double-entry accounting

11.2

A company pays all executives semimonthly.  The FLSA requires all other employees to be paid on:

a) a weekly cycle

b) a biweekly cycle

c) a semimonthly cycle

d) any established cycle

C)  Any established cycle

2.1

Calculate the employee's gross pay under the FLSA based on the following data:

Rate of pay per hour: $8; production bonus: $25; shift differential per hour: $.25; Total shift hours in workweek: 44

a) $380.64

b) $377.00

c) $404.50

d) $405.64

D)  $405.64

(44 * $8) + (44 * $.25) + 25 = $388

$388 / 44 = $8.82

4 * .5 * $8.82 = 17.64

$388 + 17.64 = $405.64

Which of the following answers BEST defines the term nonexempt under the FLSA?

a) a lower-paid class of employees

b) hourly-paid employees only

c) employees who must be paid overtime

d) a special class of employees as determined by the employer

C)  Employees who must be paid overtime

2.4

For how many years must the employer's copy of the Form 940 be retained?

a) 2

b) 3

c) 4

d) 5

C) 4

10.2

Copies of the production files and most recent payroll transactions are sent nightly to the parent company in a remote location.  This practice is part of what type of plan?

a) security

b) control

c) disaster recovery

d) maintenance

C)  Disaster recovery

12.6

Employees who are not eligible for direct deposit and receive paychecks sent through the mail are constructively paid:

a) on the check date

b) when the checks are postmarked

c) when the checks are delivered

d) when the checks are cashed

C)  when the checks are delivered

6.1

Which of the following factors provides systems security?

a) access level authorizations

b) shared passwords

c) conducting "physical payouts"

d) segregation of duties

A)  Access level authorization

12.5-3

Under the FLSA, how long are employers required to keep records relating to wages, hours and conditiond of employment?

a) 3 years

b) 4 years or until the file is no longer active

c) 7 years

d) permanently

A)  3 years

10.1

The process of balancing multiple time sheets within a specific pay period utilizes a procedure known as:

a) batch totaling

b) exception reporting

c) system documentation

d) reconciliation

A)  Batch totaling

11.6-1

In 2013, an individual worked for three employers durun the calender year, earning $38,000, $39,000 and $40,000 respectively.   What is the total amount of social security and Medicare taxes that should be withheld from the employee's wages by the three employers?

a) $8,745.90

b) $6,610.50

c) $10,003.50

d) $8,950.50

D)  $8,950.50

(38,000+39,000+40,000)*7.65%

6.7-3

On what form must mistakenly paid wages, for which no repayment is made, be reported?

a) W-2

b) W-4

c) 1099-R

d) 1099-MISC

A)  W-2

8.8-3

A report has been requested that is NOT a standard report from the system.  This type of report is called a(n):

a) ad-hoc report

b) intergrated report

c) batch system report

d) edit report

A)  Ad-hoc report

12.4-4

A procedure to have a time record signed by an employee indicates:

a) authorization for payment

b) confirmation of total hours

c) hours cannot be challenged

d) timespent with the establishment

B)  Confirmation of hours worked

11.8

For an employee earning $10.20 per hour and participating in a 401(K) plan with a deferral per pay period of $50, compute the federal taxable wages based on the following:  biweekly pap period; regular 80 hours; 4 hours over time; 3 hours double time

a) $731.40

b) $888.40

c) $898.60

d) $938.40

B)  $888.90

(80*10.20)+(4*10.20*1.5)+(3*10.20*2)-$50 = $888.90

Which of the following statesments is CORRECT regarding a federal tax levy?

a) It does not not have to be honored if any other garnishments have been served.

b) It requires a new order for each pay period.

c) It is limited by the amount of the employee's net pay.

d) It is continued each pay period until a release of levy is received.

D)  It is continued each pay period until a release of levy is received.

9.1-1

Penalties for failure to make timely deposits are determined by;

a) a flat rate of 10% for late deposits

b) 5% of the undeposited with a maximum of $100,000

c) 15% of the undeposited amount with a maximum $100,000

d) a four-tiered penalty structure based on the number of days the deposit is late

D)  A four-tiered penalty structure based on the number of days the deposit is late

8.2-3

An employer may exclude a business reimbursement from income when the employee's expenses which of the following requirements?

a) reimbursements are made with regular payroll

b) expenses are substantiated and excess advances are returned timely

c) expenses are business-related, substantiated and excess advances are retained  for future travel

d) expenses are business-related, substantiated and excess advances are returned timely

D)  Expenses are business-related, substantiated and excess advances are returned timely.

3.3-5

Under FLSA, a workweek is defined as:

a) any 7 consecutive 24-hour period

b) Sunday through Saturday

c) a minimum of a 40-hour/5-day time frame

d) stated in a collective bargining agreement

A)  any 7 consecutive 24-hour period

2.6-1

At least how often must employers report fringe benefits as income for federal tax withholding purposes?

a) each pay period

b) monthly

c) quarterly

d) annually

D)  Annually

3.5-2

Certain company records must be retained for four years to comply with regulations of which of the following agencies?

a) U.S. Citizenship and Immigration Services

b) Internal Revenue Service

c) Social Security Administration

d) Wage and Hour Division, Department of Labor

B)  Internal Revenue Service

10.2

To build morale and motivate staff, a manager must:

a) give good reviews and raises

b) reward "stars" and promote competition within each team

c) delegate accountability to staff members

d) be sincere and specific with praise

D) Be sincere and specific with praise

13.2-3

From which of the following taxes are statutory workers' compensation payments exempt?

a) federal income tax only

b) social security and Medicare taxes only

c) federal unemployment tax only

d) federal income, social security, Medicare and federal unemployment taxes

D)  Federal income, social security, Medicare and federal unemployment taxes

4.4-1

Which of the following items represents an input interface to the payroll system?

a) general ledger

b) time and attendance

c) benefit payments

d) material usage records

B)  Time and attendance

12.2-1

A company has a gross payroll of $120,589.36 that is taxable for federal income, social security and Medicare taxes.  Federal income tax withheld is $24,117.87; combined social security and Medicare taxes withheld are $9,225.09.  What is the company's total payroll tax liability for this pay period?

a) $33,342.96

b) $42,568.05

c) $40,156.26

d) $66,685.92

B)  $42,568.05

$24,117.87 + $9,225.09 + $9,225.09 = $42,568.05

One reason many companies use a Zero Balance Checking Account is that:

a) cash is available for investment until items are presented for payment at the company's bank

b) funds do not have to be depodited until the employee cashes the check

c) the company receives interest on the account

d) bank reconciliations are not required

A)  Cash is available for investment until items are presented for payment at the company's bank

11.6-2

In a customer service situation, Payroll should: 

a) assure the caller everything is okay, even when it is not

b) get in the last word

c) avoid addressing stressful issues

d) remain assertive and stay focused

D)  Remain assertive and stay focused

13.3-7

All of the following items qualify as a de minimis benefit EXCEPT:

a) occasional parties and picnics for employees

b) occasional supper money for working overtime

c) traditional holiday gifts, such as food items

d) group legal services worth less than $70 annually

D)  Group legal services worth less than $70 annually

3.2-1

All of the following steps are required when initiating direct deposit for an employee EXCEPT:

a) prenotification

b) receiving financial institution routing number

c) getting authorization from the employee

d) receiving employee's bank account number

A)  Prenotification

5.3-2

When paying supplemental wages along with regular wages WITHOUT specifying the amount of each, how would a company determine the amount of income tax to withhold from the supplemental wages if the employee has been paid no supplemental wage so far during the year and the supplement wage payment is no more than $1,000,000?

a) withhold flat 25% from the supplemental wages and withhold from regular wages using the appropriate table.

b) withhold flat 25% from the supplement wages.

c) withhold income tax as if the total single payment for a regular payroll period.

d) compare income tax withholding on the regular wages separate from the supplement wages.

C)  Withhold income tax as if the total single payment for a regular payroll period.

6.4-4

An employer deposits payroll taxes semiweekly incurs a tax liability of $55,000 on Tuesday and a liability of $110,000 on Wednesday.  When should the taxes be deposited?

a) $55,000 on Thursday and $110,000 on Friday

b) 455,000 on Friday and $110,000 on the next Wednesday

c) $110,000 on Thursday and $55,000 on Friday

d) $165,000 on Thursday

C)  $110,000 on Thursday and $55,000 on Friday

8.2-1

Documenting payroll policies and procedures willprovide all of the following results EXCEPT:

a) a vehicle for improving processes

b) a tool for assessing interrnal business controls

c) a mechanism for educating payroll partners, suppliers and customers

d) assurances of payroll personnel compency and performance

D)  Assurances of payroll personnel compency and performance

12.5-2

Which of the following records MUST be kept for four years?

a) hours worked

b) time cards

c) OSHA records

d) voided payroll checks

D)  Voided payroll checks

10.2

Techniques for conducting periodic physical payout:

a) are the same for all employees

b) vary by whether the employee is paid by check or direct deposit

c) vary for some employees such as telecommuters

d) vary by wage class and compensation level

A)  Are the same for all the employees

11.8

Which of the followong plans describes a cafeteria plan under section 125 of the Internal Revenue code?

a)  a quantified and accountable expense reimbursement plan

b) a tax-qualified retirement plan for public educational institutions

c) a plan which permits employees to select from two or more qualified taxable and nontaxable  benefits

d) a plan whereby state government employees may request that pretax dollars be set aside in a retirement account until age 59

c) A plan which permits employees to select from two or more qualified taxable and nontaxable  benefits

4.5

Using federal child support guidelines, calculate the maximum amount of support that can be withheld from an employee's semimonthly dusposible earnings of $1,500.00.  The employee is four months in arrears inmaking child support payments and has no other dependents.

a) $750.00

b) $825.00

c) $900.00

d) $975.00

D)  ($1,500 x 65% = $975)

9.1-2

Employers in non-credit reduction sstates that pay their state unemployment taxes on state can deduct up to what percentage in calculating their FUTA tax  payments?

a) 0.6%

b) 4.5%

c) 5.4%

d) 6.0%

C)  5.4%

7.1-6

Which of the following items determines the disposition of unclaimed wages?

a) state law only

b) federal law only

c) federal and state law

d) norecognized procedures exist

A)  State law only

5.5

An employee is terminated with 3 workdays remaining in a month.  The employee earned an annual salary of $24,000 and was paid semimonthly.  What is the regular compensation due this employee for the final pay period?

a)  $723.07

b)  $782.61

c)  $800.00

d)  $869.57

A)  $723.07

($24,000/24) - (($24,000/260) x 3) = $723.07

2.6-4

Employee deferrals under section 401(k) are subject to which taxes?

a) federal income and social security and Medicare taxes

b) social security  and Medicare taxes only

c) social security, Medicare and FUTA taxes

d) federal income, social security, Medicare and FUTA taxes

C)  Social security, Medicare and FUTA taxes

4.6-2

What does it mean if, at the end of an accounting period, a companny has a debit balance in a liability account?

a) The company has underdeposited taxes withheld from employee wages.

b) The company has not yet paid the third party.

c) The company has withheld too much from the employee.

d) The company has paid to a third party more than was withheld from the employee.

D)  The company has paid to a third party more than was withheld from the employee.

11.1-2

All of the following factors are advantages of having an in-house developed system EXCEPT:

a) scheduling flexibility

b) user groups

c) security

d) control of the system

B)  User groups

12.3-2

A payroll department manager should assure:

a) an independent mission statement

b) appropriate training and equipment resources for staff members

c) immediate enactment of employee suggestions

d) top payments of staff

B)  Appropriate training and equipment resources for staff

13.2

Which of the following statements describes a self-insured workers' compensation plan?

a) The state pays the workers' compensation payments

b) The employer funds the workers' compnsation payments

c) The wages will continue as if the the employee is still working

d) The individual employee is responsible for his own insurance

B)  The employer funds the workers' compensation payments

4.4-2

The proper handling of a stop payment includes all of the following steps EXCEPT:

a) reversing the direct deposit

b) canceling the payment in the payroll system

c) notifying the bank account reconciliation employees

d) documenting the reason for the transaction

A)  Reversing the direct deposit

5.3

An employee is paid $9 per hour plus a 10% differential for evening shifts.  During the past week the employee worked 24 hours on the day shift and 24 hours on the evening shift.  Under the FLSA, what are the employee's wages for the week?

a) $378.00

b) $432.00

c) $439.20

d) $491.44

D) $491.44

2.6-4

(48*9)+(24*9*10%)=$453.60/48=$9.45

($453.60+(9.45*.5*8)=$491.44

Using the 2013 percentage withholding tables, calculate the employee's withheld federal income tax based on the following data:

Weekly pay frequency; Vacation earnings: $360.62; Regular compensation: $239.38; 401(k) (pre-tax): $48.50; Married, 0 allowances

a) $41.58

b) $23.25

c) $67.83

d) $52.83

A) $41.58

$360.62+238.38-$48.50=$551.50

$551.50-503.00=($48.50*15%)+$34.30=$41.58

A request for proposal (RFP) can be used to:

a) provide vendors with technical and functional system requirements

b) request funds during a budget process

c) analyze the needs for the system

d) assign programming resources to enhance functionally

A) Provide vendors with technical and functionally system requirements

12.4-3

The Family and Medical Leave Act requires employers to maintain records for:

a) 12 weeks

b) 1 year

c) 2 years

d) 3 years

D) 3 years

10.3-5

A nonexempt employee earns $400 per week for a normal schedule of 35 hours.  Under the FLSA, how much would this employee be due if 48 hours were worked?

a) $400.00

b) $594.40

c) $548.64

d) $433.32

B) $594.40

$400/35=11.43

(48*$11.43)+($11.43*8*.5)=$594.40

How may federal income tax be withheld from separation pay and accrued vacation wages totaling $20,000 that are paid at the time of termination and identified separately on the employee's pay stub, if the employee has been paid $25,000 so far this year and had income tax withheld from her most recent wages?

a) using the aggregate method only

b) using the prior 12 months' tax rate

c) at the optional flat rate for all payouts at termination only

d) at the optional flat rate or using the aggregate method

D)  At the optional flat rate or using the aggregate method

6.4-4

A payroll register for the pay period shows gross earnings of $300,000 and deductions of $120,000.  The entry to the payroll expense account would be:

a) $120,000

b) $180,000

c) $300,000

d) $420,000

C) $300,000

11.2

Payroll system user documentation should include:

a) a copy of the RFP

b) copies of project development documents

c) details of disaster recovery procedures

d) the history of the payroll system conversion

C)  Details of the disaster recovery procedures

12.5-2

When checking for phantom employees, which of the following actions should be taken?

a) notify the employees of an impending physical payout

b) have the managers hand checks to their employees

c) have employees pick up checks and direct deposit/paycard advices and show identification

d) mail checks directly to employees' homes

C)  Have employees pick up checks and direct deposit/paycard advices and show identification.

11.8

An employee is to be awarded a net bonus of $2,000 as supplemental wages in 2013.  Year-to-date regular and supplemental earnings are $15,000.  Using the current optional flat tax rate and social security and Medicare tax rates, what should be the gross amount of the payment if the employee lives and works in a state with no income tax?

a) $2,969.56

b) $2,906.98

c) $2,666.67

d) $2,883.92

A) $2,969.56

3.4-11

$2,000/ (100%/(25%+6.2%+1.45%))=$2,000/67.35%=$2,969.56

Which form is used to request an employer identification number?

a) I-9

b) SS-4

c) SS-5

d) SS-8

B) SS-4

8.1

One element of a payroll calendar is:

a) pay frequency

b) hire dates

c) total renumeration

d) social security numbers

A) Pay frequency

2.6-1,5-1

With online input, what is the BEST way to control miscellaneous payments?

a) verification of a sample of entered data

b) a visual audit of the online activity report

c) an auditor's comparison of each input source document to the data base record

d) a comparison of the online report totals to predetermined totals taken from the source documents

D) A comparison of the online report totals to predetermined totals taken from the source documents

11.6-1

All of the following actions demonstrate a strong customer service orientation EXCEPT:

a) exhibiting a customer friendly attitude

b) viewing customers as the most important part of the Job

c) using voice mail to answer calls from customers

d) establishing relationships with people

C) Using voice mail to answer calls from customers

13.3-7

Employer-sponsored athletic facilities may be nontaxable fringe benefits if the:

a) employer requires substantiation of the amount, time and business purpose of the facility's use

b) employer incurs no substantial additonal cost, except labor, to provide the facility

c) facility is on the employer's premises

d) facility qualifies as a de minimis fringe

C) Facility is on the employer's premises

3.2-1

When an employer is advised by the IRS that an employee's Form W-4 is invalid, what action must the employer take?

a) all further Forms W-4 mustbe sent to the IRS as long as the employee is being paid.

b) employers have no obligation to change exemptions unless notified by the employee through a new Form W-4

c) withhold on the basis of information provided by the IRS

d) the employer should send notice at the end of the quarter, requesting that the employee contact the IRS to clear up the  problem

C) Withhold on the basis of information provided by the IRS

6.3-1

A team compromised of members of a department 's staff with the intention of improving their own process is a:

a) cross-functional team

b) conversion team

c) functional team

d) management team

C) Functional team

13.3-5

An employee who works for more than one employer and has exceeded the social security wage baepse may:

a) take a credit against federal income tax on Form 1040

b) demand that the employer refund the overage

c) apply the social security tax to next year's withholdings

d) apply the overage to benefits paid at age 65

A) Take a credit against federal income tax on Form 1040

6.7-3

When determining the value of employer-provided parking, which of the following valuation methods is allowed?

a) employer's cost

b) employee's cost

c) lower of employee's cost or fair market value

d) employer's fair market value

D) Employee's fair market value

3.2-1

What is the purpose of the payroll accrual entry?

a) to recognize expenses in the period in which they incurred

b) to reverse an entry made in error

c) to recognize expenses in the period they were paid

d) to reverse an entry from a previous period

A) To recognize expenses in the period in which they were incurred

11.5

Which of the following steps is LEAST important during the parallel testing phase of a new payroll system?

a) the testing of employee earnings and deductions accuracy

b) the verification of employees transferred to the new system from the old system

c) the verification of tax withholding calculations for employees

d) testing the functionally of a wage attachment process

D)  Testing the functionally of a wage attachment process

12.4-5

All of the following practices are acceptable to an external auditor EXPECT:

a) the accounting department reconciling the payroll account

b) the payroll supervisor verifying the deposits are made timely

c) storage of blank payroll checks in the payroll department

d) the treasury department being responsible for the signature of payroll checks

C)  Storage of blank payroll checks in the payroll department

11.8

All of the following types of compensation are subject to social security tax EXPECT:

a) tips under $100

b) deferred bonus

c) third-party sick pay up to $3,000

d) workers' compensation benefits

D) Workers' compensation benefits

4.4-1

Which of the following outcomes is the PRIMARY advantage of developing an in-house system?

a) outsiders are not involved in a firm's daily operations

b) costs are reduced and can be distributed on an equitable basis

c) the employer controls the entire computer system

d) time is saved by not having to explain business policies and practices

C) The employer controls the entire computer system

12.3-2

An employee covered by group health insurance at the time his employment terminates to return to school is entitled to COBRA continuation rights for:

a) 12 months

b) 18 months

c) 24 months

d) 30 months

B) 18 months

4.1-5

How often are Form 940 taxable wages reported?

a) annually

b) semi-monthly

c) quarterly

d) monthly

A)  Annually

7.1-7

An employee claims married and no withholding allowances on her 2013 Form W-4, earns $700 bi-weekly and contributes $50 per pay period to a 401(k) plan.  Using the percentage method, what is the total of the biweekly deductions from the employee's pay for federal income and social security and Medicare taxes?

a) $86.65

b) $121.15

c) $109.90

d) $72.65

A) $86.65

6.4-2

FIT=$700-$50=$650-$319=$331*10%=33.10

FICA=$700*7.65%=$53.55

$33.10+$53.55=$86.65

On a company's financial statements, payroll tax expense appears in the:

a) balance sheet

b) accrued payroll

c) salaries expense

d) income statement

D) Income statement

11.7-2

What is the chief advantage of a vendor payroll package?

a) reduced processing time

b) inexpensivess and ease of inatallation

c) no required major in-house system development

d) lower cost than a service provider contract

C) No required major in-house system devlopment

12.3-2

Which of the following elements is essential to a disaster recovery plan?

a) an excess supply of checks and direct deposit stubs

b) a compatible off-site remote location to produce payrolls

c) detailed documentation for current company policies

d) a procedure for limiting security system access

B) A compatible off-site remote location to produce payrolls

12.6

Which of the following practices is a strong internal control procedure?

a) have the payroll bank account reconciled in the payroll department

b) have the payroll manager distribute paychecks

c) place payroll checks under the personal control of the payroll manager

d) have a person, other than the person who requested and authorized the payments, prepare the payroll checks

D)  Have a person, other than the person who requested and authorized the payments, prepare the checks.

11.8

During 2013, an employee worked for company A and quit after earning $114,000.  In the same year the employee was hired by company B.  With respect to social security, Medicare and FUTA, how should cmpany B treat the employee's earnings as of the first wage payment?

a) start accumulating social security, Medicare and FUTA wages and withhold both social security and Medicare taxes

b) start accumulating medicare only, and withhold only Medicare tax

c) start accumulating social security, Medicare and FUTA wages, but withhold only Medicare tax only

d) start accumulating Medicare wages only but withhold both social security and Medicare taxes

A)  Start accumulating social security, Medicare and FUTA wages, and withhold both social security and Medicare taxes

6.7-3

Which of the following documents proves an employee's identity and authorization to work?

a) social security card

b) unexpired U.S. passport

c) birth certificate

d) Form I-9

B)  Unexpired U.S. passport

1.8

How are salaries reflected on the income statement?

a) income

b) assets

c) accruals

d) expenses

D) Expenses

11.7-2

An employees is paid a bonus of $1,500 with a regular biweely wage payment of $2,000 in 2013 that is indicated separately on the employee's pay stub.  The employee has received no supplemental wages so far this year.  The employee has an elective deferral of 5% of regular wages made to the 401(k) plan each pay period.  For federal income tax withholding purposes, the company uses the optional flat rate for all bonuses and the precentage mehod for regular wage payments.  The employee's W-4 claims married with 2 allowances.  The employee has no state or local income taxes or any other deductions.  What is the employee's net pay?

a) $2,675.25

b) $2,535.05

c) $2,599.45

d) $2,669.45

C) $2,559.45

4.6-2, 6.4-2, 6.4-4, 6.7-3

FIT=$2,000-$100=$1,900-(2*150) = $1,600

$1,600-$1,006=($594*15%)+68.70=157.80

1500*25%=$375

FICA=$3,50087.65%=$267.75

$2,000-$1,500-$100-$157.80-$375-$267.75=$2,599.45

All of the following techniques would enhance the level of customer service EXCEPT:

a) adding more customer service personnel

b) publishing payroll customer service procedures, calendars and directories

c) utilizing automated call processing tools to take and process call inquiries

d) training compant management on pay calculation and tax withholding rules

D)  Training company management on pay calculation and tax withholding rules

13.3-7

The KEY difference between user guides and payroll policies and procedures is:

a) user guides focus on tasks associated with automated tools

b) payroll policies and procedures set company policies and standards

c) user giudes help payroll personnel interpret company policy

d) payroll policies and procedures permot human resources to design new compensation and benefits programs

A)  User guides focus on tasks associated with automated tools

12.5-2

A local national is defined as an employee:

a) from another country working in the U.S.

b) from the U.S. working in a foreign country

c) from a foreign company working in the U.S.

d) from a foreign country working in his or her home country location

D)  From a foreign country working in his or her home country location

14.2

What is the effect of failingto record salaries that are earned but not paid at the end of an accounting period?

a) understatement of expenses for the period

b) overstatement of expenses for the period

c) understatement of assets for the period

d) overstatement of liabilities for the period  

A)  Understatement of the expenses for the period

11.3

One employment data element in the masterfile is:

a) hourly rate of pay

b) marital status

c) birthdate

d) occupation

A)  Hourly rate of pay

10.8-1

Which of the following authorities dictates the information provided on a payroll check stub?

a) individual states

b) Federal Unemployment Tax Act

c) Federal Wage and Hour Division

d) Social Security Administration

A) Individual states

5.4

Which of the following forms may be submitted to the IRS in order to receive a written determination of a worker's status as an employee or independant contractor?

a) Form W-5

b) Form SS-5

c) Form SS-8

d) Form W-9

C)  Form SS-8

1.2-2