FPC Module 3 Quiz Questions
When would an employee have negative net pay?
a) Taxes exceed other deductions
b) Total deductions exceed gross wages
c) Involuntary deductions exceed voluntary deductions
d) Gross wages exceed total deductions
Submit - ANS-b) Total deductions exceed gross wages
An employee's total deductions may exceed their gross wages, which results in negative net
pay.
(module 3 Lesson 2)v= M3L2
An exempt employee earns $1,430.00 semimonthly. The employee's deductions include $77.00
for income tax, $109.40 for social security and Medicare taxes, $150.00 for court-ordered child
support, and $50.00 for a state tax levy. Calculate the employee's semimonthly disposable
earnings. - ANS-1243.6
1430 - 77 - 109.40 = 1243.6
Under the CCPA, disposable earnings are determined by subtracting all deductions required by
law from an employee's gross earnings. Deductions required by law include federal income,
state income, local income, social security and Medicare taxes.
M3L1
The Debt Collection Improvement Act (DCIA) authorizes federal agencies to:
a) prioritize bankruptcy orders over federal and state tax levies received before the bankruptcy
order.
b) collect no more than 10% of disposable earnings to satisfy a delinquent student loan.
c) garnish an employee's wages without a court order for delinquent nontax debt owed to the
United States.
d) place restrictions on how the states may regulate creditor garnishments.
Submit - ANS-c) garnish an employee's wages without a court order for delinquent nontax debt
owed to the United States.
i put D
, The Debt Collection Improvement Act of 1996 (DCIA) authorizes federal agencies to garnish,
without a court order, the disposable pay of an individual to collect a delinquent nontax debt
owed to the United States.
M3L1
An employee's income is insufficient to deduct all the ordered wage attachments. The orders
were received in the following order: A child support order, a state tax levy, a federal tax levy,
and a creditor garnishment. Which wage attachment has priority?
a) Child support
b) Federal tax levy
c) State tax levy
d) Creditor garnishment - ANS-a) child support
i put B
The general priority for involuntary deductions is as follows: child support orders, bankruptcy
orders, federal administrative garnishments, federal tax levies, student loan garnishments, state
tax levies, local tax levies, and creditor garnishments.
M3L1
An employer has a federal tax levy in effect on an employee who wants to increase the amount
of a charitable deduction from $50.00 per pay period to $75.00. The effect of the change will:
a. reduce the exempt amount when figuring net pay.
b. increase the exempt amount when figuring net pay.
c. reduce the amount paid to the IRS.
d. increase the amount paid to the IRS. - ANS-a. reduce the exempt amount when figuring net
pay.
i put B
Under IRS rules, when an employee voluntarily increases a deduction after a federal tax levy is
in effect, the change reduces the exempt amount when figuring net pay and does not reduce the
amount withheld for the IRS.
M3L1
An employee's monthly disposable pay is $750.00 with involuntary deductions received in the
following order:
$175.00 federal tax levy
$50.00 creditor garnishment
When would an employee have negative net pay?
a) Taxes exceed other deductions
b) Total deductions exceed gross wages
c) Involuntary deductions exceed voluntary deductions
d) Gross wages exceed total deductions
Submit - ANS-b) Total deductions exceed gross wages
An employee's total deductions may exceed their gross wages, which results in negative net
pay.
(module 3 Lesson 2)v= M3L2
An exempt employee earns $1,430.00 semimonthly. The employee's deductions include $77.00
for income tax, $109.40 for social security and Medicare taxes, $150.00 for court-ordered child
support, and $50.00 for a state tax levy. Calculate the employee's semimonthly disposable
earnings. - ANS-1243.6
1430 - 77 - 109.40 = 1243.6
Under the CCPA, disposable earnings are determined by subtracting all deductions required by
law from an employee's gross earnings. Deductions required by law include federal income,
state income, local income, social security and Medicare taxes.
M3L1
The Debt Collection Improvement Act (DCIA) authorizes federal agencies to:
a) prioritize bankruptcy orders over federal and state tax levies received before the bankruptcy
order.
b) collect no more than 10% of disposable earnings to satisfy a delinquent student loan.
c) garnish an employee's wages without a court order for delinquent nontax debt owed to the
United States.
d) place restrictions on how the states may regulate creditor garnishments.
Submit - ANS-c) garnish an employee's wages without a court order for delinquent nontax debt
owed to the United States.
i put D
, The Debt Collection Improvement Act of 1996 (DCIA) authorizes federal agencies to garnish,
without a court order, the disposable pay of an individual to collect a delinquent nontax debt
owed to the United States.
M3L1
An employee's income is insufficient to deduct all the ordered wage attachments. The orders
were received in the following order: A child support order, a state tax levy, a federal tax levy,
and a creditor garnishment. Which wage attachment has priority?
a) Child support
b) Federal tax levy
c) State tax levy
d) Creditor garnishment - ANS-a) child support
i put B
The general priority for involuntary deductions is as follows: child support orders, bankruptcy
orders, federal administrative garnishments, federal tax levies, student loan garnishments, state
tax levies, local tax levies, and creditor garnishments.
M3L1
An employer has a federal tax levy in effect on an employee who wants to increase the amount
of a charitable deduction from $50.00 per pay period to $75.00. The effect of the change will:
a. reduce the exempt amount when figuring net pay.
b. increase the exempt amount when figuring net pay.
c. reduce the amount paid to the IRS.
d. increase the amount paid to the IRS. - ANS-a. reduce the exempt amount when figuring net
pay.
i put B
Under IRS rules, when an employee voluntarily increases a deduction after a federal tax levy is
in effect, the change reduces the exempt amount when figuring net pay and does not reduce the
amount withheld for the IRS.
M3L1
An employee's monthly disposable pay is $750.00 with involuntary deductions received in the
following order:
$175.00 federal tax levy
$50.00 creditor garnishment
