Payroll Accounting 2026 – 10th Edition by Jeanette
Landin | Complete Test Bank with Solutions
1) Payroll errors can lead to underreported wages and
staffing issues.
A) True
B) False
Answer: A
Rationale: Inaccurate payroll processing can result in
incorrect wage reporting to government agencies,
underpayment of employees, legal penalties, and
administrative burdens that cause employee
dissatisfaction and turnover.
2) The Fair Labor Standards Act (FLSA) has two levels of
coverage: individual and enterprise.
A) True
B) False
Answer: A
Rationale: The FLSA provides "enterprise coverage" for
1
,businesses engaged in interstate commerce and
"individual coverage" for employees whose specific job
duties involve interstate commerce or the production of
goods for commerce.
3) The Occupational Safety and Health Act (OSHA) of
1970 mandates standards for which of the following?
A) Minimum wage
B) Personal protective equipment
C) Family and medical leave
D) Retirement plans
Answer: B
Rationale: OSHA's primary purpose is to ensure safe
working conditions, which includes setting and enforcing
standards for personal protective equipment (PPE),
hazard communication, and recordkeeping.
4) Which of the following best describes why employee
retirement benefits are offered by businesses?
A) They are required by the FLSA.
2
,B) They are a recruiting and retention strategy.
C) They replace the need for Social Security.
D) They are mandated by the 16th Amendment.
Answer: B
Rationale: Competitive benefits packages, including
retirement plans, are key tools for attracting qualified
candidates and retaining experienced employees, though
they are generally not required by federal law.
5) The Family Medical Leave Act (FMLA) provides paid
leave and guaranteed job retention for all employees.
A) True
B) False
Answer: B
Rationale: FMLA provides unpaid, job-protected leave for
specific family and medical reasons. It does not mandate
paid leave, and it applies only to employers with 50 or
more employees and employees who meet eligibility
requirements.
3
, 6) Workers may access partial Social Security retirement
benefits as early as age:
A) 65
B) 67
C) 62
D) 59½
Answer: C
Rationale: While full retirement age is later (66–67
depending on birth year), workers can begin receiving
reduced Social Security retirement benefits as early as
age 62.
7) Which of the following is considered an employer cost
associated with payroll?
A) Federal income tax withholding
B) State income tax withholding
C) Employer portion of FICA tax
D) Employee Roth 401(k) contributions
4
Landin | Complete Test Bank with Solutions
1) Payroll errors can lead to underreported wages and
staffing issues.
A) True
B) False
Answer: A
Rationale: Inaccurate payroll processing can result in
incorrect wage reporting to government agencies,
underpayment of employees, legal penalties, and
administrative burdens that cause employee
dissatisfaction and turnover.
2) The Fair Labor Standards Act (FLSA) has two levels of
coverage: individual and enterprise.
A) True
B) False
Answer: A
Rationale: The FLSA provides "enterprise coverage" for
1
,businesses engaged in interstate commerce and
"individual coverage" for employees whose specific job
duties involve interstate commerce or the production of
goods for commerce.
3) The Occupational Safety and Health Act (OSHA) of
1970 mandates standards for which of the following?
A) Minimum wage
B) Personal protective equipment
C) Family and medical leave
D) Retirement plans
Answer: B
Rationale: OSHA's primary purpose is to ensure safe
working conditions, which includes setting and enforcing
standards for personal protective equipment (PPE),
hazard communication, and recordkeeping.
4) Which of the following best describes why employee
retirement benefits are offered by businesses?
A) They are required by the FLSA.
2
,B) They are a recruiting and retention strategy.
C) They replace the need for Social Security.
D) They are mandated by the 16th Amendment.
Answer: B
Rationale: Competitive benefits packages, including
retirement plans, are key tools for attracting qualified
candidates and retaining experienced employees, though
they are generally not required by federal law.
5) The Family Medical Leave Act (FMLA) provides paid
leave and guaranteed job retention for all employees.
A) True
B) False
Answer: B
Rationale: FMLA provides unpaid, job-protected leave for
specific family and medical reasons. It does not mandate
paid leave, and it applies only to employers with 50 or
more employees and employees who meet eligibility
requirements.
3
, 6) Workers may access partial Social Security retirement
benefits as early as age:
A) 65
B) 67
C) 62
D) 59½
Answer: C
Rationale: While full retirement age is later (66–67
depending on birth year), workers can begin receiving
reduced Social Security retirement benefits as early as
age 62.
7) Which of the following is considered an employer cost
associated with payroll?
A) Federal income tax withholding
B) State income tax withholding
C) Employer portion of FICA tax
D) Employee Roth 401(k) contributions
4
