FPC Exam Fundamental Payroll questions
and answers 2026\2027 A+ Grade
668-W
- correct answer Notice of Levy on Wages, Salary, and Other Income
1096
- correct answer Annual Summary and Transmittal of U.S. Information Returns
Under the FLSA how old must a minor be to be employed?
- correct answer 14
What is the FUTA tax rate?
- correct answer 6.0%
On form 941, the employer reports
- correct answer Social Security Wages
What is the formula for calculating an employees net pay?
- correct answer Gross pay-deductions for taxes- other deductions
Which plan discriminates in favor of highly compensated employees?
- correct answer Nonqualified deferred compensation plans
What is the federal minimum wage per hour on January 1, 2018?
- correct answer $7.25
What law determines time limits with which employees must be paid after wages are earned?
- correct answer State Laws
,Cafeteria plans are authorized by what internal revenue code section?
- correct answer 125
The direct deposit data sent to the bank after payroll processing is an example of
- correct answer Interface
What taxes, if any, must be withheld from payments to an independent contractor who provided a tin?
- correct answer No taxes are withheld
An external audit:
- correct answer Allows an objective assessment of the financial statements.
Employees' privacy rights are governed by all of the following except:
- correct answer Local Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to be paid
overtime?
- correct answer Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any?
- correct answer They are included in all tax calculations
What is the 2018 wage base for social security tax?
- correct answer $128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what must the
employer do?
- correct answer Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following tasks except:
- correct answer Recognize changes in laws and regulations
, An employee's profit sharing bonus is payable in the year following his death. How should the bonus be
taxed and reported?
- correct answer Withhold no taxes and report the bonus on for 1099-misc.
In what ways can a computerized system increase the accuracy of employees paychecks?
- correct answer By reducing human error
What federal taxes must an employer withhold from an employees reported tips?
- correct answer Federal income, social security and medicare tax
The main purpose of batch controls is to
- correct answer Validate data entry accuracy
Which of the following types of compensation is taxable?
- correct answer Backpay awards
What is used when calculating an employee's gross up?
- correct answer Net set
Employees can provide their employer with their marital status and allowances for income tax
withholding purposes by:
- correct answer Completing form W-4
Generally, what is the largest expense for most companies?
- correct answer Salaries and benefits
What authority controls the frequency with which employees must be paid?
- correct answer State Laws
What is the general ledger?
- correct answer A record of transactions by account
and answers 2026\2027 A+ Grade
668-W
- correct answer Notice of Levy on Wages, Salary, and Other Income
1096
- correct answer Annual Summary and Transmittal of U.S. Information Returns
Under the FLSA how old must a minor be to be employed?
- correct answer 14
What is the FUTA tax rate?
- correct answer 6.0%
On form 941, the employer reports
- correct answer Social Security Wages
What is the formula for calculating an employees net pay?
- correct answer Gross pay-deductions for taxes- other deductions
Which plan discriminates in favor of highly compensated employees?
- correct answer Nonqualified deferred compensation plans
What is the federal minimum wage per hour on January 1, 2018?
- correct answer $7.25
What law determines time limits with which employees must be paid after wages are earned?
- correct answer State Laws
,Cafeteria plans are authorized by what internal revenue code section?
- correct answer 125
The direct deposit data sent to the bank after payroll processing is an example of
- correct answer Interface
What taxes, if any, must be withheld from payments to an independent contractor who provided a tin?
- correct answer No taxes are withheld
An external audit:
- correct answer Allows an objective assessment of the financial statements.
Employees' privacy rights are governed by all of the following except:
- correct answer Local Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to be paid
overtime?
- correct answer Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any?
- correct answer They are included in all tax calculations
What is the 2018 wage base for social security tax?
- correct answer $128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what must the
employer do?
- correct answer Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following tasks except:
- correct answer Recognize changes in laws and regulations
, An employee's profit sharing bonus is payable in the year following his death. How should the bonus be
taxed and reported?
- correct answer Withhold no taxes and report the bonus on for 1099-misc.
In what ways can a computerized system increase the accuracy of employees paychecks?
- correct answer By reducing human error
What federal taxes must an employer withhold from an employees reported tips?
- correct answer Federal income, social security and medicare tax
The main purpose of batch controls is to
- correct answer Validate data entry accuracy
Which of the following types of compensation is taxable?
- correct answer Backpay awards
What is used when calculating an employee's gross up?
- correct answer Net set
Employees can provide their employer with their marital status and allowances for income tax
withholding purposes by:
- correct answer Completing form W-4
Generally, what is the largest expense for most companies?
- correct answer Salaries and benefits
What authority controls the frequency with which employees must be paid?
- correct answer State Laws
What is the general ledger?
- correct answer A record of transactions by account
