2025 FPC PAYROLL FUNDAMENTALS FINAL EXAM QUESTIONS
EVALUATION WITH ANSWERS 2025/2026 GRADED A+
Balance sheet - a financial statement that presents the business's financial position in
terms of assets, liabilities and owner's equity as of a certain date
Asset - resource acquired by a business that is consumed by the business
Employee identification number (EIN) - the employer's account number with the Internal
Revenue
Disposable Earnings - the part of the employee's earnings remaining after deductions
required by law
Customer Service - in a payroll environment, customer service consists of reliability,
responsiveness, assurance, empathy and tangibles
EFTPS - Electronic Federal Tax Payment System
Expense Account - shows cost for goods and services consumed by the company
during an accounting period
FUTA - Federal Unemployment Tax Act
Garnishment - a legal proceeding authorizing an involuntary transfer of an employee's
wages to a creditor or to satisfy a debt
Net Pay - the part of the employee's wages that remains after all deductions are
subtracted
OFDI - Originating Depository Financial Institution
$7.25 - Federal Minimum wage
$118,500 - Social security tax limit on employee's wages
6.2% - 2016 Social Security tax rate
2.35% - Medicare for wages over $200K paid by EE only - ER continues to pay 1.45%
Federal Rounding rule - less than $.50 round down; round up for $.50 or more
Direct Deposit - the electronic transfer of an employees net pay to a financial institution
of their choice
CHROME - Child Labor
Hours Worked
, Retention
Overtime Pay
Minimum Wage
Exempt from
OAR - ODFI- Original financial institution
ACH-
RDFI- Receiving financial institution
CLEAR - Capital Credit
Liability Credit
Expense Debit
Assets Debit
Revenue Credit
Interface - the point where two distinct data-processing elements meet
Real Time Processing - data entered in the system updates records and immediately
returns the results
Simple Simon Marries Tooth Fairy - Saturday, Sunday Monday or Tuesday > deposit
Friday
Weird Thomas Freezes Worms - Wed, Thurs or Fri > deposit Wednesday
ADA - Americans with Disabilities Act
ADEA - Age Discrimination in Employment Act
After-tax deduction - A deduction from an employee's pay that does not reduce the
employee's taxable wages. It is taken out only after all applicable taxes and other
deductions have been withheld (e.g., union dues, garnishments, charitable
contributions).
Escheat - In the context of payroll, the turning over of unclaimed wages to the state after
a period of time determined by state law.
Fluctuating workweek - An arrangement between an employer and a nonexempt
employee to pay the employee a fixed weekly salary even though the employee's hours
may vary from week to week.
FPC - Fundamentals of Payroll Certification
Validity Checks - Shows whether or not data entered meets the requirements set forth
by a company
EVALUATION WITH ANSWERS 2025/2026 GRADED A+
Balance sheet - a financial statement that presents the business's financial position in
terms of assets, liabilities and owner's equity as of a certain date
Asset - resource acquired by a business that is consumed by the business
Employee identification number (EIN) - the employer's account number with the Internal
Revenue
Disposable Earnings - the part of the employee's earnings remaining after deductions
required by law
Customer Service - in a payroll environment, customer service consists of reliability,
responsiveness, assurance, empathy and tangibles
EFTPS - Electronic Federal Tax Payment System
Expense Account - shows cost for goods and services consumed by the company
during an accounting period
FUTA - Federal Unemployment Tax Act
Garnishment - a legal proceeding authorizing an involuntary transfer of an employee's
wages to a creditor or to satisfy a debt
Net Pay - the part of the employee's wages that remains after all deductions are
subtracted
OFDI - Originating Depository Financial Institution
$7.25 - Federal Minimum wage
$118,500 - Social security tax limit on employee's wages
6.2% - 2016 Social Security tax rate
2.35% - Medicare for wages over $200K paid by EE only - ER continues to pay 1.45%
Federal Rounding rule - less than $.50 round down; round up for $.50 or more
Direct Deposit - the electronic transfer of an employees net pay to a financial institution
of their choice
CHROME - Child Labor
Hours Worked
, Retention
Overtime Pay
Minimum Wage
Exempt from
OAR - ODFI- Original financial institution
ACH-
RDFI- Receiving financial institution
CLEAR - Capital Credit
Liability Credit
Expense Debit
Assets Debit
Revenue Credit
Interface - the point where two distinct data-processing elements meet
Real Time Processing - data entered in the system updates records and immediately
returns the results
Simple Simon Marries Tooth Fairy - Saturday, Sunday Monday or Tuesday > deposit
Friday
Weird Thomas Freezes Worms - Wed, Thurs or Fri > deposit Wednesday
ADA - Americans with Disabilities Act
ADEA - Age Discrimination in Employment Act
After-tax deduction - A deduction from an employee's pay that does not reduce the
employee's taxable wages. It is taken out only after all applicable taxes and other
deductions have been withheld (e.g., union dues, garnishments, charitable
contributions).
Escheat - In the context of payroll, the turning over of unclaimed wages to the state after
a period of time determined by state law.
Fluctuating workweek - An arrangement between an employer and a nonexempt
employee to pay the employee a fixed weekly salary even though the employee's hours
may vary from week to week.
FPC - Fundamentals of Payroll Certification
Validity Checks - Shows whether or not data entered meets the requirements set forth
by a company
