2026 e d i t i o n TEST 1
PAYROLL Student
Chapter 1
INSTRUCTOR’S COPY
Date
ACCOUNTING A
SCORING RECORD
Section Total Points
60
Deductions Score
Bieg/Toland B
Total
40
100
Section A—DIRECTIONS: Each of the following statements is either true or false. Unless directed otherwise
by your instructor, indicate your choice in the Answers column by writing “T” for a true answer or “F” for a false
answer. (2 points for each correct answer)
For
Answers Scoring
1. The Fair Labor Standards Act sets the current minimum wage at $7.50 per hour. . .......................... F 1.
2. The Federal Insurance Contributions Act covers restrictions on the employment of child labor. ..... F 2.
3. The Federal Income Tax Withholding Law requires that all employment data be kept on file
permanently. ...................................................................................................................................... F 3.
4. In cases where both federal and state regulations cover the minimum wage for the same
employee, the higher of the two rates is always used as the standard minimum wage. ..................... T 4.
5. Those records that are required by the various payroll laws must generally be kept on file for
only the current year. ......................................................................................................................... F 5.
6. Unions and employment agencies are excluded from coverage under the Civil Rights Act of
1964. .................................................................................................................................................. F 6.
7. Employers’ photocopying of new employees’ I-9 documents is not required under the
Immigration Reform and Control Act. ............................................................................................... T 7.
8. The Age Discrimination in Employment Act protects virtually all workers, but only to the age of 70. .... F 8.
9. FICA taxes are levied upon employers only. ..................................................................................... F 9.
10. Criminal background checks can be used by employers on all job applicants. ................................. F 10.
11. Most employers are faced with two unemployment taxes—federal and state. .................................. T 11.
12. Every state imposes state unemployment taxes on employers in their state. ..................................... T 12.
13. As part of their FMLA, a few states have implemented a paid family leave plan. ............................ T 13.
14. The FUTA tax paid to the federal government is used to pay benefits to the unemployed workers
who qualify for the benefits. .............................................................................................................. F 14.
15. Under the Affordable Care Act, all employers are required to provide insurance coverage for all
full-time employees. .......................................................................................................................... F 15.
16. The information reporting requirements of the Affordable Care Act only involve the filing of
each employee’s Form W-2. . ............................................................................................................ F 16.
17. Once vested, workers have the right to receive a pension at retirement age, even if they no longer
work for that company. ...................................................................................................................... T 17.
18. Under the Family and Medical Leave Act, employers can exempt the highest paid 10 percent of
their workforce from its provisions. .................................................................................................. T 18.
19. Under federal law, new-hire reporting also applies to newly hired independent contractors. ........... F 19.
20. Form I-9, Employment Eligibility Verification, is completed only by employees who were born
outside the United States. .................................................................................................................. F 20.
ATS–1
®
© 2026
,ATS–2 Chapter 1/Achievement Test Solutions
SECTION A (continued)
For
Answers Scoring
21. The deadline for an employee to complete and sign Section 1 of Form I-9 is one year from the
date of hire. ....................................................................................................................................... F 21.
22. Under the Family and Medical Leave Act, an employer can substitute an employee’s earned paid
leave for any part of the 12-week family leave. ................................................................................ T 22.
23. Workers’ compensation insurance applies only to work-related injury, illness, or death. ................ T 23.
24. Pre-hire questions pertaining to religion, sex, national origin, or age are allowed when these
factors are bona fide occupational requirements for a job................................................................. T 24.
25. If an investigative consumer report is being used, the applicant must be given a written notice that
the information obtained will be used in the employment decision. ................................................... T 25.
26. Employers cannot terminate an employee for providing false information on an application form
once the employee begins employment............................................................................................. F 26.
27. The hiring notice is a record sent to the Payroll Department so that the new employee can
be added to the payroll. ..................................................................................................................... T 27.
28. The payroll register is used by employers in preparing Form W-2, the wage and tax statement
sent to each employee at year-end. .................................................................................................... F 28.
29. The payroll register is used to provide the information needed to record the payroll entries made
in the journal on each payday. ........................................................................................................... T 29.
30. The FLSA requires all employees to be paid weekly or biweekly. .................................................. F 30.
Section B—DIRECTIONS: Complete each of the following sentences by writing in the Answers column the
letter of the word or words that correctly completes each statement. (5 points for each correct answer)
For
Answers Scoring
1. Which of the following is not a provision of the Fair Labor Standards Act (FLSA)? (A) Restricts
the employment of child labor, (B) Sets minimum wage, (C) Forbids discrimination in hiring,
(D) Mandates equal pay for equal work, regardless of sex, (E) All of these choices are provisions of
the FLSA .................................................................................................................................................. C 1.
2. Which of the following bases for discrimination in employment practices is not covered in Title
VII of the Civil Rights Act of 1964 as amended? (A) Color, (B) Religion, (C) Age, (D) Sex,
(E) National origin ............................................................................................................................ C 2.
3. Which of the following acts covers employee pension and welfare plans? (A) Affordable Care Act,
(B) Federal Insurance Contributions Act, (C) Age Discrimination in Employment
Act, (D) Family and Medical Leave Act, (E) Employee Retirement Income Security Act. ............. E 3.
4. Medicare is a two-part health insurance program that was part of an amendment to what act?
(A) Federal Insurance Contributions Act, (B) Federal Income Tax Withholding Law, (C) Federal
Unemployment Tax Act, (D) Affordable Care Act, (E) Fair Labor Standards Act........................... A 4.
5. Which of the following statements is not a provision of ERISA? (A) ERISA applies to pension and
welfare plans established by any employer engaged in commerce. (B) ERISA establishes minimum
vesting schedules that protect the workers’ benefits. (C) ERISA provides that all employees are
eligible to set up their own individual retirement accounts. (D) ERISA requires each employer to
establish a pension plan. (E) All of these choices are provisions of ERISA. .................................... D 5.
6. Which of the following acts deals with the minimum wage paid to laborers for contractors who
supply materials to any agency of the United States? (A) Davis-Bacon, (B) Walsh-Healey Public
Contracts, (C) Federal Insurance Contributions, (D) McNamara-O’Hara Service Contract,
(E) None of these are correct............................................................................................................. B 6.
7. Which of the following forms is used to complete each employee’s Form W-2, Wage and Tax
Statement? (A) Payroll register, (B) Employee’s paycheck, (C) Change in payroll rate form,
(D) Employee’s individual retirement account, (E) Employee’s earnings record ............................. E 7.
8. Protection under the provisions of the Age Discrimination in Employment Act begins at what
age? (A) 18, (B) 65, (C) 21, (D) 40, (E) 50 ....................................................................................... D 8.
®
© 2026
, EXAMINATION QUESTIONS
To aid instructors using Payroll Accounting, we have provided a section of examination
questions in this manual. The section contains true-false and multiple-choice questions
for Chapter 1, with the addition of short problems for Chapters 2 to 6, arranged accord-
ing to the presentation of the subject matter within these chapters of the textbook.
There are a sufficient number of test questions so that you may vary your examina-
tions from semester to semester or prepare different examinations for each section of
the course you may be teaching. Each of the true-false and multiple-choice questions is
preceded by a letter answer to the question and a page reference to the textbook page
upon which the answer may be found. These test questions are also available within
Now, so that tests can be created from our online site.
CHAPTER 1
True-False Questions
T 1. The Fair Labor Standards Act is commonly known as the Federal
1-3 Wage and Hour Law.
F 2. The FLSA imposes no recordkeeping requirements on employers.
1-3
T 3. The employer is required by the FLSA to display a poster that informs
1-3 employees of the provisions of the law.
F 4. All states have set their minimum wage to be the same as the federal
1-3 government.
F 5. Under the Federal Insurance Contributions Act, the Medicare portion
1-3 of the tax is paid only by the employer.
F 6. The FLSA provides health insurance for the aged and disabled
1-4 (Medicare).
T 7. The tax paid to the federal government for unemployment taxes is
1-4 used for paying state and federal administrative expenses of the
unemployment program.
T 8. The Self-Employment Contributions Act imposes a tax on the net earn-
1-4 ings from self-employment derived by an individual from any trade or
business.
F 9. Each state imposes an income tax on employees that is 2 percent of
1-4 gross wages.
F 10. Only six states do not impose a state unemployment tax on employers
1-4 in their state.
E–1
®
© 2026
, E–2 Chapter 1/Examination Questions
T 11. One of the provisions of coverage of the Civil Rights Act is that the
1-5 employer must have 15 or more workers.
F 12. Title VII of the Civil Rights Act protects all employees from arbitrary
1-5 dismissal.
T 13. Under the Civil Rights Act of 1964, the U.S. government is classified
1-5 as an exempt employer.
T 14. Employers not subject to Title VII coverage may come within the scope
1-7 of the Civil Rights Act by reason of a contract or subcontract involving
federal funds.
T 15. By the use of executive orders, the federal government has banned
1-7 discrimination in employment on government contracts.
T 16. An exception to the protection that the Age Discrimination in
1-7 Employment Act provides for all workers over 40 involves executives
who are 65 or older and who have held high policy-making positions
during the two-year period prior to retirement.
T 17. Under the Federal Personal Responsibility and Work Opportunity Rec-
1-8 onciliation Act, every employer is required to report the name, address,
and social security number of each new employee to the appropriate
state agency.
T 18. Form I-9 must be completed by each new hire.
1-8
F 19. Employers are now required to photocopy new employees’ Form I-9
1-8 documents.
T 20. In order for the Walsh-Healey Public Contracts Act to protect laborers
1-9 for contractors who furnish materials to any agency of the United
States, the contract amount must be at least $15,000.
F 21. Under FMLA, the time off must be used in one uninterrupted period of
1-10 time.
T 22. Under the Family and Medical Leave Act, employers can exempt an
1-11 employee who has not worked for the employer for at least one year
and has worked for the company at least 1,250 hours in the last year.
F 23. FUTA was designed to ensure that workers who are covered by pen-
1-12 sion plans receive benefits from those plans.
T 24. Under ERISA, vesting conveys to employees the right to share in a
1-12 retirement fund in the event they are terminated before the normal
retirement age.
®
© 2026
PAYROLL Student
Chapter 1
INSTRUCTOR’S COPY
Date
ACCOUNTING A
SCORING RECORD
Section Total Points
60
Deductions Score
Bieg/Toland B
Total
40
100
Section A—DIRECTIONS: Each of the following statements is either true or false. Unless directed otherwise
by your instructor, indicate your choice in the Answers column by writing “T” for a true answer or “F” for a false
answer. (2 points for each correct answer)
For
Answers Scoring
1. The Fair Labor Standards Act sets the current minimum wage at $7.50 per hour. . .......................... F 1.
2. The Federal Insurance Contributions Act covers restrictions on the employment of child labor. ..... F 2.
3. The Federal Income Tax Withholding Law requires that all employment data be kept on file
permanently. ...................................................................................................................................... F 3.
4. In cases where both federal and state regulations cover the minimum wage for the same
employee, the higher of the two rates is always used as the standard minimum wage. ..................... T 4.
5. Those records that are required by the various payroll laws must generally be kept on file for
only the current year. ......................................................................................................................... F 5.
6. Unions and employment agencies are excluded from coverage under the Civil Rights Act of
1964. .................................................................................................................................................. F 6.
7. Employers’ photocopying of new employees’ I-9 documents is not required under the
Immigration Reform and Control Act. ............................................................................................... T 7.
8. The Age Discrimination in Employment Act protects virtually all workers, but only to the age of 70. .... F 8.
9. FICA taxes are levied upon employers only. ..................................................................................... F 9.
10. Criminal background checks can be used by employers on all job applicants. ................................. F 10.
11. Most employers are faced with two unemployment taxes—federal and state. .................................. T 11.
12. Every state imposes state unemployment taxes on employers in their state. ..................................... T 12.
13. As part of their FMLA, a few states have implemented a paid family leave plan. ............................ T 13.
14. The FUTA tax paid to the federal government is used to pay benefits to the unemployed workers
who qualify for the benefits. .............................................................................................................. F 14.
15. Under the Affordable Care Act, all employers are required to provide insurance coverage for all
full-time employees. .......................................................................................................................... F 15.
16. The information reporting requirements of the Affordable Care Act only involve the filing of
each employee’s Form W-2. . ............................................................................................................ F 16.
17. Once vested, workers have the right to receive a pension at retirement age, even if they no longer
work for that company. ...................................................................................................................... T 17.
18. Under the Family and Medical Leave Act, employers can exempt the highest paid 10 percent of
their workforce from its provisions. .................................................................................................. T 18.
19. Under federal law, new-hire reporting also applies to newly hired independent contractors. ........... F 19.
20. Form I-9, Employment Eligibility Verification, is completed only by employees who were born
outside the United States. .................................................................................................................. F 20.
ATS–1
®
© 2026
,ATS–2 Chapter 1/Achievement Test Solutions
SECTION A (continued)
For
Answers Scoring
21. The deadline for an employee to complete and sign Section 1 of Form I-9 is one year from the
date of hire. ....................................................................................................................................... F 21.
22. Under the Family and Medical Leave Act, an employer can substitute an employee’s earned paid
leave for any part of the 12-week family leave. ................................................................................ T 22.
23. Workers’ compensation insurance applies only to work-related injury, illness, or death. ................ T 23.
24. Pre-hire questions pertaining to religion, sex, national origin, or age are allowed when these
factors are bona fide occupational requirements for a job................................................................. T 24.
25. If an investigative consumer report is being used, the applicant must be given a written notice that
the information obtained will be used in the employment decision. ................................................... T 25.
26. Employers cannot terminate an employee for providing false information on an application form
once the employee begins employment............................................................................................. F 26.
27. The hiring notice is a record sent to the Payroll Department so that the new employee can
be added to the payroll. ..................................................................................................................... T 27.
28. The payroll register is used by employers in preparing Form W-2, the wage and tax statement
sent to each employee at year-end. .................................................................................................... F 28.
29. The payroll register is used to provide the information needed to record the payroll entries made
in the journal on each payday. ........................................................................................................... T 29.
30. The FLSA requires all employees to be paid weekly or biweekly. .................................................. F 30.
Section B—DIRECTIONS: Complete each of the following sentences by writing in the Answers column the
letter of the word or words that correctly completes each statement. (5 points for each correct answer)
For
Answers Scoring
1. Which of the following is not a provision of the Fair Labor Standards Act (FLSA)? (A) Restricts
the employment of child labor, (B) Sets minimum wage, (C) Forbids discrimination in hiring,
(D) Mandates equal pay for equal work, regardless of sex, (E) All of these choices are provisions of
the FLSA .................................................................................................................................................. C 1.
2. Which of the following bases for discrimination in employment practices is not covered in Title
VII of the Civil Rights Act of 1964 as amended? (A) Color, (B) Religion, (C) Age, (D) Sex,
(E) National origin ............................................................................................................................ C 2.
3. Which of the following acts covers employee pension and welfare plans? (A) Affordable Care Act,
(B) Federal Insurance Contributions Act, (C) Age Discrimination in Employment
Act, (D) Family and Medical Leave Act, (E) Employee Retirement Income Security Act. ............. E 3.
4. Medicare is a two-part health insurance program that was part of an amendment to what act?
(A) Federal Insurance Contributions Act, (B) Federal Income Tax Withholding Law, (C) Federal
Unemployment Tax Act, (D) Affordable Care Act, (E) Fair Labor Standards Act........................... A 4.
5. Which of the following statements is not a provision of ERISA? (A) ERISA applies to pension and
welfare plans established by any employer engaged in commerce. (B) ERISA establishes minimum
vesting schedules that protect the workers’ benefits. (C) ERISA provides that all employees are
eligible to set up their own individual retirement accounts. (D) ERISA requires each employer to
establish a pension plan. (E) All of these choices are provisions of ERISA. .................................... D 5.
6. Which of the following acts deals with the minimum wage paid to laborers for contractors who
supply materials to any agency of the United States? (A) Davis-Bacon, (B) Walsh-Healey Public
Contracts, (C) Federal Insurance Contributions, (D) McNamara-O’Hara Service Contract,
(E) None of these are correct............................................................................................................. B 6.
7. Which of the following forms is used to complete each employee’s Form W-2, Wage and Tax
Statement? (A) Payroll register, (B) Employee’s paycheck, (C) Change in payroll rate form,
(D) Employee’s individual retirement account, (E) Employee’s earnings record ............................. E 7.
8. Protection under the provisions of the Age Discrimination in Employment Act begins at what
age? (A) 18, (B) 65, (C) 21, (D) 40, (E) 50 ....................................................................................... D 8.
®
© 2026
, EXAMINATION QUESTIONS
To aid instructors using Payroll Accounting, we have provided a section of examination
questions in this manual. The section contains true-false and multiple-choice questions
for Chapter 1, with the addition of short problems for Chapters 2 to 6, arranged accord-
ing to the presentation of the subject matter within these chapters of the textbook.
There are a sufficient number of test questions so that you may vary your examina-
tions from semester to semester or prepare different examinations for each section of
the course you may be teaching. Each of the true-false and multiple-choice questions is
preceded by a letter answer to the question and a page reference to the textbook page
upon which the answer may be found. These test questions are also available within
Now, so that tests can be created from our online site.
CHAPTER 1
True-False Questions
T 1. The Fair Labor Standards Act is commonly known as the Federal
1-3 Wage and Hour Law.
F 2. The FLSA imposes no recordkeeping requirements on employers.
1-3
T 3. The employer is required by the FLSA to display a poster that informs
1-3 employees of the provisions of the law.
F 4. All states have set their minimum wage to be the same as the federal
1-3 government.
F 5. Under the Federal Insurance Contributions Act, the Medicare portion
1-3 of the tax is paid only by the employer.
F 6. The FLSA provides health insurance for the aged and disabled
1-4 (Medicare).
T 7. The tax paid to the federal government for unemployment taxes is
1-4 used for paying state and federal administrative expenses of the
unemployment program.
T 8. The Self-Employment Contributions Act imposes a tax on the net earn-
1-4 ings from self-employment derived by an individual from any trade or
business.
F 9. Each state imposes an income tax on employees that is 2 percent of
1-4 gross wages.
F 10. Only six states do not impose a state unemployment tax on employers
1-4 in their state.
E–1
®
© 2026
, E–2 Chapter 1/Examination Questions
T 11. One of the provisions of coverage of the Civil Rights Act is that the
1-5 employer must have 15 or more workers.
F 12. Title VII of the Civil Rights Act protects all employees from arbitrary
1-5 dismissal.
T 13. Under the Civil Rights Act of 1964, the U.S. government is classified
1-5 as an exempt employer.
T 14. Employers not subject to Title VII coverage may come within the scope
1-7 of the Civil Rights Act by reason of a contract or subcontract involving
federal funds.
T 15. By the use of executive orders, the federal government has banned
1-7 discrimination in employment on government contracts.
T 16. An exception to the protection that the Age Discrimination in
1-7 Employment Act provides for all workers over 40 involves executives
who are 65 or older and who have held high policy-making positions
during the two-year period prior to retirement.
T 17. Under the Federal Personal Responsibility and Work Opportunity Rec-
1-8 onciliation Act, every employer is required to report the name, address,
and social security number of each new employee to the appropriate
state agency.
T 18. Form I-9 must be completed by each new hire.
1-8
F 19. Employers are now required to photocopy new employees’ Form I-9
1-8 documents.
T 20. In order for the Walsh-Healey Public Contracts Act to protect laborers
1-9 for contractors who furnish materials to any agency of the United
States, the contract amount must be at least $15,000.
F 21. Under FMLA, the time off must be used in one uninterrupted period of
1-10 time.
T 22. Under the Family and Medical Leave Act, employers can exempt an
1-11 employee who has not worked for the employer for at least one year
and has worked for the company at least 1,250 hours in the last year.
F 23. FUTA was designed to ensure that workers who are covered by pen-
1-12 sion plans receive benefits from those plans.
T 24. Under ERISA, vesting conveys to employees the right to share in a
1-12 retirement fund in the event they are terminated before the normal
retirement age.
®
© 2026
