CPP CERTIFIED PAYROLL PROFESSIONAL EXAM ACTUAL EXAM QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
Counseling is appropriate when:
a. salaries have been frozen.
b. introducing a new procedure.
c. explaining tax law changes.
d. orienting new employees. -(answer)a. salaries have been frozen.
In addition to the accuracy-related penalty for underpayment of taxes, if the underpayment of taxes is
due to fraud, the IRS may asses an additional penalty of: -(answer)75%
If an employer's total tax liability for the lookback period is $75,000.00, a tax liability less than $100,000
must be deposited no later than: -(answer)Wednesday or Friday under the semiweekly rules.
A company has accrued $23,665.00 of vacation pay to a liability account. When employees are paid the
vacation amount due, the entries to the vacation liability account will be recorded as a: -(answer)debit
to the liability account.
Under the FLSA, when a highly compensated exempt employee receives less than $100,000.00 in
compensation during the year, the employer may: -(answer)within one month after the end of the year,
make a final payment to the employee to reach $100,000.00 in annual compensation.
Cafeteria plans and other flexible benefit plans are generally funded by either of the following
mechanisms: -(answer)"flex dollars" or "flex credits", salary reduction, or after tax contributions.
IRC §125 Cafeteria plans are generally funded by all of the following mechanisms EXCEPT:
a. flex dollars".
b. COBRA.
,CPP CERTIFIED PAYROLL PROFESSIONAL EXAM ACTUAL EXAM QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
c. after-tax employee contributions.
d. salary reduction. -(answer)b. COBRA.
Form W-4S allows the third-party sick pay provider to withhold federal income tax based on: -(answer)a
flat amount.
A National Medical Support Notice requires an employer to: -(answer)honor the qualified medical child
support order.
An employee with year-to-date wages of $25,000.00 was disabled for four months and was paid
$6,200.00 by a third-party insurer. The disability plan premiums are paid entirely by the employer. No
Form W-4S was provided to the insurer. Calculate the amount of federal income, social security, and
Medicare taxes the third party payer must withhold. -(answer)$474.30 - Social security and Medicare
taxes are withheld for six calendar months after the employee's last day of work.
If an employer sells or transfers its business: -(answer)Form 941 must be filed by both the previous and
current owners for the quarter during which the sale took place. Each employer must report only the
wages it paid and taxes it withheld.
If an employer goes out of business, completion of Part 3 of Form 941 is required with the final date it
paid wages. This action also accelerates the date the Forms W-2 are due to SSA to: -(answer)the end of
the second month following the quarter the business closed.
An employee earns $1,000.00 semimonthly. Deductions include $235.00 for federal income, social
security, Medicare, and state taxes and $300.00 in child support. Calculate the amount that can be
deducted for a creditor garnishment. -(answer)Under the CCPA for a creditor garnishment, an employer
must withhold the lesser of 25% of the employee's disposable earnings or the difference between the
employee's disposable earnings and 30 times the minimum wage to satisfy the creditor garnishment. If
an employee has an involuntary deduction with a higher priority deduction than the CCPA limit for
creditor garnishments, nothing will be withheld.
, CPP CERTIFIED PAYROLL PROFESSIONAL EXAM ACTUAL EXAM QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
What is a Lock-In letter? -(answer)A letter from the IRS that requires the employer to change the with
holdings for federal tax.
How long do IRS Payroll records need to be saved? -(answer)4 years after the tax returns due date. (ie
940, 941, W-2 and W-3)
What is the allowable tip credit? -(answer)No more than $5.12 per hour
Minimum wage for tipped employees -(answer)$2.13 per hour (combined with tips must equal $7.25)
Social Security Wage Tax Limit -(answer)$132,900
What is the Mandatory Flat Rate for supplemental pay? -(answer)Exceeding $1 Million is 37%
What is the Optional Flat Rate for Supplemental Pay? -(answer)Not Exceeding $1 Million is 22%
If form W-4 is incomplete, the employer must: -(answer)Reject the form
Under the FLSA, an employee wort time ends when the employee: -(answer)ceases performing principal
activities
When an employee wants to continue her exempt status the next year, she must file a new W-4 form
by: -(answer)February 15.
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
Counseling is appropriate when:
a. salaries have been frozen.
b. introducing a new procedure.
c. explaining tax law changes.
d. orienting new employees. -(answer)a. salaries have been frozen.
In addition to the accuracy-related penalty for underpayment of taxes, if the underpayment of taxes is
due to fraud, the IRS may asses an additional penalty of: -(answer)75%
If an employer's total tax liability for the lookback period is $75,000.00, a tax liability less than $100,000
must be deposited no later than: -(answer)Wednesday or Friday under the semiweekly rules.
A company has accrued $23,665.00 of vacation pay to a liability account. When employees are paid the
vacation amount due, the entries to the vacation liability account will be recorded as a: -(answer)debit
to the liability account.
Under the FLSA, when a highly compensated exempt employee receives less than $100,000.00 in
compensation during the year, the employer may: -(answer)within one month after the end of the year,
make a final payment to the employee to reach $100,000.00 in annual compensation.
Cafeteria plans and other flexible benefit plans are generally funded by either of the following
mechanisms: -(answer)"flex dollars" or "flex credits", salary reduction, or after tax contributions.
IRC §125 Cafeteria plans are generally funded by all of the following mechanisms EXCEPT:
a. flex dollars".
b. COBRA.
,CPP CERTIFIED PAYROLL PROFESSIONAL EXAM ACTUAL EXAM QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
c. after-tax employee contributions.
d. salary reduction. -(answer)b. COBRA.
Form W-4S allows the third-party sick pay provider to withhold federal income tax based on: -(answer)a
flat amount.
A National Medical Support Notice requires an employer to: -(answer)honor the qualified medical child
support order.
An employee with year-to-date wages of $25,000.00 was disabled for four months and was paid
$6,200.00 by a third-party insurer. The disability plan premiums are paid entirely by the employer. No
Form W-4S was provided to the insurer. Calculate the amount of federal income, social security, and
Medicare taxes the third party payer must withhold. -(answer)$474.30 - Social security and Medicare
taxes are withheld for six calendar months after the employee's last day of work.
If an employer sells or transfers its business: -(answer)Form 941 must be filed by both the previous and
current owners for the quarter during which the sale took place. Each employer must report only the
wages it paid and taxes it withheld.
If an employer goes out of business, completion of Part 3 of Form 941 is required with the final date it
paid wages. This action also accelerates the date the Forms W-2 are due to SSA to: -(answer)the end of
the second month following the quarter the business closed.
An employee earns $1,000.00 semimonthly. Deductions include $235.00 for federal income, social
security, Medicare, and state taxes and $300.00 in child support. Calculate the amount that can be
deducted for a creditor garnishment. -(answer)Under the CCPA for a creditor garnishment, an employer
must withhold the lesser of 25% of the employee's disposable earnings or the difference between the
employee's disposable earnings and 30 times the minimum wage to satisfy the creditor garnishment. If
an employee has an involuntary deduction with a higher priority deduction than the CCPA limit for
creditor garnishments, nothing will be withheld.
, CPP CERTIFIED PAYROLL PROFESSIONAL EXAM ACTUAL EXAM QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+
What is a Lock-In letter? -(answer)A letter from the IRS that requires the employer to change the with
holdings for federal tax.
How long do IRS Payroll records need to be saved? -(answer)4 years after the tax returns due date. (ie
940, 941, W-2 and W-3)
What is the allowable tip credit? -(answer)No more than $5.12 per hour
Minimum wage for tipped employees -(answer)$2.13 per hour (combined with tips must equal $7.25)
Social Security Wage Tax Limit -(answer)$132,900
What is the Mandatory Flat Rate for supplemental pay? -(answer)Exceeding $1 Million is 37%
What is the Optional Flat Rate for Supplemental Pay? -(answer)Not Exceeding $1 Million is 22%
If form W-4 is incomplete, the employer must: -(answer)Reject the form
Under the FLSA, an employee wort time ends when the employee: -(answer)ceases performing principal
activities
When an employee wants to continue her exempt status the next year, she must file a new W-4 form
by: -(answer)February 15.
