Fundamental Payroll Certification Exam with Verified
Question and Answer
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 employee’s 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
1
, 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 employee’s
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 -Back
pay 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
What, if any, is the 2018 wage base for Medicare tax? - Correct Answer -There is no
limit
An employer should remind employees to complete an amended W-4 if they have
any changes in status by - Correct Answer -December 1 of each year
If an employee provides an invalid W-4, the employer must: - Correct Answer -
Refuse to accept the form
Under the FLSA, an employee’s workday is defined as the: - Correct Answer -time
the employee is performing principle activities
2
Question and Answer
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 employee’s 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
1
, 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 employee’s
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 -Back
pay 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
What, if any, is the 2018 wage base for Medicare tax? - Correct Answer -There is no
limit
An employer should remind employees to complete an amended W-4 if they have
any changes in status by - Correct Answer -December 1 of each year
If an employee provides an invalid W-4, the employer must: - Correct Answer -
Refuse to accept the form
Under the FLSA, an employee’s workday is defined as the: - Correct Answer -time
the employee is performing principle activities
2
