APA FPC Exam UPDATED ACTUAL Exam
Questions and CORRECT Answers
(1) Challenges in payroll - CORRECT ANSWER - complexity, communication,
technology, accuracy
(1) Payroll Process - CORRECT ANSWER - employee (new hire, W4, I9), payroll
(reports, reconciles), gov. (tax, reporting), employee (W2, pay statements)
(1) Tax withholding for employees - CORRECT ANSWER - FIT, SS, Medicare, state,
local and pay employer share
(1) TIN - CORRECT ANSWER - Taxpayer Identification Number (1099s)
(1) Worker status - CORRECT ANSWER - workers, either W2 or 1099, W2 either exempt
or nonexempt
(1) Common Law Test - CORRECT ANSWER - sets own hours, can work for multiple
employers, works by the job, can employ assistants, own tools/equipment, terms
(1) Reasonable Basis Test - CORRECT ANSWER - employers can classify certain
workers as 1099 for tax purposes even though the ee meets requirements of Common Law test
for W2 if they have a reasonable basis for doing so (longstanding practice, judicial precedent,
consistently treated workers as 1099 with 1099-MISC form)
(1) PEO - CORRECT ANSWER - organization bears burden of paying, withholding,
reporting, providing benefits
(1) Immigration Reform and Control Act of 1986 (IRCA) - CORRECT ANSWER -
requires employer to verify ee eligibility for employment in the U.S.
, (1) Illegal Immigrant Penalties - CORRECT ANSWER - range from $375 for first offense,
$16k for third
(1) Verification of eligibility - CORRECT ANSWER - burden of verification falls to
employer after 1986, need I9 by 1st day of work
(1) SSA - CORRECT ANSWER - Social Security Administration, 240 million W2/yr with
10% having numbers that do not match
(1) Earnings Suspense File - CORRECT ANSWER - where SSA places unposted wage
amounts
(1) Employee's Withholding Allowance Certificate - CORRECT ANSWER - W4
(1) SSNVS - CORRECT ANSWER - Social Security Number Verification Service to
verify SSN, requires FEIN/ee name, SSN, DOB
(1) Form SS5 - CORRECT ANSWER - Application for a Social Security Card
(1) New Hire Reporting - CORRECT ANSWER - 20 days of hire, ee name, address, ssn,
date of employment, employer name, addres, FEIN
(1) HHS - CORRECT ANSWER - Secretary of Health and Human Services, multistate
employers
(1) FLSA - CORRECT ANSWER - Fair Labor Standards Act of 1938 guarantees
minimum wage, overtime premium, minors, equal pay protection
(1) Exempt - CORRECT ANSWER - not covered by FLSA minimum wage/overtime
requirements
Questions and CORRECT Answers
(1) Challenges in payroll - CORRECT ANSWER - complexity, communication,
technology, accuracy
(1) Payroll Process - CORRECT ANSWER - employee (new hire, W4, I9), payroll
(reports, reconciles), gov. (tax, reporting), employee (W2, pay statements)
(1) Tax withholding for employees - CORRECT ANSWER - FIT, SS, Medicare, state,
local and pay employer share
(1) TIN - CORRECT ANSWER - Taxpayer Identification Number (1099s)
(1) Worker status - CORRECT ANSWER - workers, either W2 or 1099, W2 either exempt
or nonexempt
(1) Common Law Test - CORRECT ANSWER - sets own hours, can work for multiple
employers, works by the job, can employ assistants, own tools/equipment, terms
(1) Reasonable Basis Test - CORRECT ANSWER - employers can classify certain
workers as 1099 for tax purposes even though the ee meets requirements of Common Law test
for W2 if they have a reasonable basis for doing so (longstanding practice, judicial precedent,
consistently treated workers as 1099 with 1099-MISC form)
(1) PEO - CORRECT ANSWER - organization bears burden of paying, withholding,
reporting, providing benefits
(1) Immigration Reform and Control Act of 1986 (IRCA) - CORRECT ANSWER -
requires employer to verify ee eligibility for employment in the U.S.
, (1) Illegal Immigrant Penalties - CORRECT ANSWER - range from $375 for first offense,
$16k for third
(1) Verification of eligibility - CORRECT ANSWER - burden of verification falls to
employer after 1986, need I9 by 1st day of work
(1) SSA - CORRECT ANSWER - Social Security Administration, 240 million W2/yr with
10% having numbers that do not match
(1) Earnings Suspense File - CORRECT ANSWER - where SSA places unposted wage
amounts
(1) Employee's Withholding Allowance Certificate - CORRECT ANSWER - W4
(1) SSNVS - CORRECT ANSWER - Social Security Number Verification Service to
verify SSN, requires FEIN/ee name, SSN, DOB
(1) Form SS5 - CORRECT ANSWER - Application for a Social Security Card
(1) New Hire Reporting - CORRECT ANSWER - 20 days of hire, ee name, address, ssn,
date of employment, employer name, addres, FEIN
(1) HHS - CORRECT ANSWER - Secretary of Health and Human Services, multistate
employers
(1) FLSA - CORRECT ANSWER - Fair Labor Standards Act of 1938 guarantees
minimum wage, overtime premium, minors, equal pay protection
(1) Exempt - CORRECT ANSWER - not covered by FLSA minimum wage/overtime
requirements
