Payroll Accounting 2019 – 5th Edition by Jeanette Landin & Paulette Schirmer –
Complete Test Bank for Chapters 1–7
Payroll Accounting 2019, 5e (Landin)
Chapter 1 Payroll Practices and System Fundamentals
1) Internal payroll reports are used to inform a firm's managers and decision-makers about labor
costs.
Answer: TRUE
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
2) The Lilly Ledbetter Act of 2009 was the first act that mandated equal pay for men and women
who perform identical tasks.
Answer: FALSE
Explanation: The Equal Pay Act of 1963 was the first legislation that addressed pay equity.
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) The Age Discrimination in Employment Act (ADEA) prohibits discrimination in employment
practices for workers who are older than age 50.
Answer: FALSE
Explanation: ADEA protects workers who are older than age 40.
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Diversity
Accessibility: Keyboard Navigation
4) Payroll-related legislation often reflects emerging issues in societal evolution.
Answer: TRUE
Difficulty: 2 Medium
Topic: Identify Legislation That Pertains to Payroll and Business
1
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Analyze
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
5) The Worker's Compensation Act of 1935 legislated the payment of worker's compensation
insurance.
Answer: FALSE
Explanation: No federal legislation exists regarding the payment of worker's compensation
insurance.
Difficulty: 1 Easy
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
6) The ethical principle of due care pertains to the upholding of rights and justice of
stakeholders.
Answer: FALSE
Explanation: The principle of due care pertains to the accountant's professional competence.
Difficulty: 2 Medium
Topic: Discuss the Ethical Guidelines for Payroll Accounting
Learning Objective: 01-03 Discuss the Ethical Guidelines for Payroll Accounting
Bloom's: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
7) Payroll accounting systems may involve an integrated software package that contains
business-planning tools.
Answer: TRUE
Difficulty: 1 Easy
Topic: Identify Contemporary Payroll Practices
Learning Objective: 01-04 Identify Contemporary Payroll Practices
Bloom's: Understand
AACSB: Technology
Accessibility: Keyboard Navigation
8) The IRS uses EINs to track employers for tax purposes.
Answer: TRUE
Difficulty: 1 Easy
Topic: Identify Contemporary Payroll Practices
Learning Objective: 01-04 Identify Contemporary Payroll Practices
Bloom's: Remember
2
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,AACSB: Communication
Accessibility: Keyboard Navigation
9) The payroll volume tends to be greater for small companies than for large businesses.
Answer: FALSE
Explanation: Payroll volume is lower for small companies because the number of employees is
smaller, which leads to a lower number of payroll transaction.
Difficulty: 1 Easy
Topic: Compare Payroll Processing Options for Different Businesses
Learning Objective: 01-05 Compare Payroll Processing Options for Different Businesses
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
10) The use of outsourced payroll relieves employers of the responsibility for payroll accuracy.
Answer: FALSE
Explanation: The employer is responsible for payroll accuracy regardless of who processes it.
Difficulty: 2 Medium
Topic: Compare Payroll Processing Options for Different Businesses
Learning Objective: 01-05 Compare Payroll Processing Options for Different Businesses
Bloom's: Analyze
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
11) The Age Discrimination in Employment Act of 1967 prevented mandatory retirement for
workers over the age of:
A) 55.
B) 50.
C) 45.
D) 40.
Answer: D
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Diversity
Accessibility: Keyboard Navigation
12) Which Act extended medical benefits for certain terminated employees?
A) ADEA
B) COBRA
C) OSHA
D) ERISA
3
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
, Answer: B
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
13) Within how many days after initially commencing work must an employer report a new
employee, according to PRWOR?
A) 7
B) 10
C) 20
D) 30
Answer: C
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Communication
Accessibility: Keyboard Navigation
14) The Sarbanes-Oxley Act legislated penalties for violations of which Act?
A) HIPAA
B) ERISA
C) PRWOR
D) DOMA
Answer: B
Difficulty: 2 Medium
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
15) The U.S. v. Windsor case repealed an Act and affected payroll tax withholdings for certain
employees. Which Act did Windsor repeal?
A) OSHA
B) ARRA
C) ATRA
D) DOMA
Answer: D
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
4
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
Complete Test Bank for Chapters 1–7
Payroll Accounting 2019, 5e (Landin)
Chapter 1 Payroll Practices and System Fundamentals
1) Internal payroll reports are used to inform a firm's managers and decision-makers about labor
costs.
Answer: TRUE
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
2) The Lilly Ledbetter Act of 2009 was the first act that mandated equal pay for men and women
who perform identical tasks.
Answer: FALSE
Explanation: The Equal Pay Act of 1963 was the first legislation that addressed pay equity.
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) The Age Discrimination in Employment Act (ADEA) prohibits discrimination in employment
practices for workers who are older than age 50.
Answer: FALSE
Explanation: ADEA protects workers who are older than age 40.
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Diversity
Accessibility: Keyboard Navigation
4) Payroll-related legislation often reflects emerging issues in societal evolution.
Answer: TRUE
Difficulty: 2 Medium
Topic: Identify Legislation That Pertains to Payroll and Business
1
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Analyze
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
5) The Worker's Compensation Act of 1935 legislated the payment of worker's compensation
insurance.
Answer: FALSE
Explanation: No federal legislation exists regarding the payment of worker's compensation
insurance.
Difficulty: 1 Easy
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
6) The ethical principle of due care pertains to the upholding of rights and justice of
stakeholders.
Answer: FALSE
Explanation: The principle of due care pertains to the accountant's professional competence.
Difficulty: 2 Medium
Topic: Discuss the Ethical Guidelines for Payroll Accounting
Learning Objective: 01-03 Discuss the Ethical Guidelines for Payroll Accounting
Bloom's: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
7) Payroll accounting systems may involve an integrated software package that contains
business-planning tools.
Answer: TRUE
Difficulty: 1 Easy
Topic: Identify Contemporary Payroll Practices
Learning Objective: 01-04 Identify Contemporary Payroll Practices
Bloom's: Understand
AACSB: Technology
Accessibility: Keyboard Navigation
8) The IRS uses EINs to track employers for tax purposes.
Answer: TRUE
Difficulty: 1 Easy
Topic: Identify Contemporary Payroll Practices
Learning Objective: 01-04 Identify Contemporary Payroll Practices
Bloom's: Remember
2
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,AACSB: Communication
Accessibility: Keyboard Navigation
9) The payroll volume tends to be greater for small companies than for large businesses.
Answer: FALSE
Explanation: Payroll volume is lower for small companies because the number of employees is
smaller, which leads to a lower number of payroll transaction.
Difficulty: 1 Easy
Topic: Compare Payroll Processing Options for Different Businesses
Learning Objective: 01-05 Compare Payroll Processing Options for Different Businesses
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
10) The use of outsourced payroll relieves employers of the responsibility for payroll accuracy.
Answer: FALSE
Explanation: The employer is responsible for payroll accuracy regardless of who processes it.
Difficulty: 2 Medium
Topic: Compare Payroll Processing Options for Different Businesses
Learning Objective: 01-05 Compare Payroll Processing Options for Different Businesses
Bloom's: Analyze
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
11) The Age Discrimination in Employment Act of 1967 prevented mandatory retirement for
workers over the age of:
A) 55.
B) 50.
C) 45.
D) 40.
Answer: D
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Diversity
Accessibility: Keyboard Navigation
12) Which Act extended medical benefits for certain terminated employees?
A) ADEA
B) COBRA
C) OSHA
D) ERISA
3
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
, Answer: B
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
13) Within how many days after initially commencing work must an employer report a new
employee, according to PRWOR?
A) 7
B) 10
C) 20
D) 30
Answer: C
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Communication
Accessibility: Keyboard Navigation
14) The Sarbanes-Oxley Act legislated penalties for violations of which Act?
A) HIPAA
B) ERISA
C) PRWOR
D) DOMA
Answer: B
Difficulty: 2 Medium
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
15) The U.S. v. Windsor case repealed an Act and affected payroll tax withholdings for certain
employees. Which Act did Windsor repeal?
A) OSHA
B) ARRA
C) ATRA
D) DOMA
Answer: D
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
4
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
