PAYROLL FUNDAMENTALS UPDATED EXAM TEST
PAPER 1 QUESTIONS AND SOLUTIONS RATED A+
✔✔Salary - ✔✔A fixed annual(yearly) sum of money divided among equal pay periods
✔✔Biweekly - ✔✔employees are paid every two weeks. 26 times a year
✔✔Accounting Period - ✔✔the period of time covered in an income statement
✔✔Aggregate method - ✔✔method of withholding federal income tax from
supplemental wages in which the supplemental payment is combined with the regular
wages paid during the most recent payroll period.
✔✔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
PAPER 1 QUESTIONS AND SOLUTIONS RATED A+
✔✔Salary - ✔✔A fixed annual(yearly) sum of money divided among equal pay periods
✔✔Biweekly - ✔✔employees are paid every two weeks. 26 times a year
✔✔Accounting Period - ✔✔the period of time covered in an income statement
✔✔Aggregate method - ✔✔method of withholding federal income tax from
supplemental wages in which the supplemental payment is combined with the regular
wages paid during the most recent payroll period.
✔✔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
