CPP CERTIFIED PAYROLL PROFESSIONAL
APA ACTUAL TEST QUESTIONS WITH
COMPLETE ANSWER KEY
●● T/F: An accountant who provides bookkeeping and payroll services
to several local businesses and works at her own office is an independent
contractor.
Answer: True
●● T/F: Telemarketers working under the direction of a company are
usually independent contractors.
Answer: False
●● T/F: Workers hired through a temporary help agency are not
employees of the client company.
Answer: True
●● T/F: Full-time life insurance salespersons are always considered
statutory employees and are never subject to FUTA tax.
Answer: False. Their earnings must consist solely of commissions to be
exempt from FUTA.
,●● T/F: If the employer has the right to control what work will be done
and how that work will be done, an employer- employee relationship
exists under the common law test.
Answer: True
●● What does a social security card prove in terms of an employee's
work authorization IRCA?
Answer: It is not proof of Identity.
●● What is the name of the program employers can use to verify the
employment authorization status of new hires with W.S Citizenship and
Immigration Services?
Answer: E-Verify
●● When must employers report newly hired employees under the
federal new hire reporting requirements?
Answer: 20 calendar days
●● What information must be reported by an employer for each new hire
under federal new hire reporting requirement?
Answer: Name, address, Social Security number, First day worked
,●● Which factors are considered not to be important by the IRS in
making a worker classification determination because of changes in the
workplace over the years?
Answer: - part time / full time
- location
- hours worked
●● Why would many employers rather use workers who are not
employees to perform services for them?
Answer: They don't have to withhold taxes or provide benefits
●● What factors do the courts and the Department of Labor consider
when making an employment status determination under the FLSA?
Answer: - Is work part of the business
- make a profit or loss
- investment of tools and material
- work requires special skills
- How permanent is the working relationship
- control over employee
●● When a client company contracts with a certified PEO, who is
responsible for withholding and /or paying federal income, social
security, Medicare, and FUTA taxes on the wages the PEO pays to the
employees at the client's worksite?
, Answer: The PEO is responsible for all taxes and wages due employee
●● What is form I-9 used for?
Answer: Verify legal right to work in US
●● What are the three parts of the ABC test, and what is the test used to
determine?
Answer: - Worker free from control
- Work performed outside Company Business
- Independent trade
●● When leasing an employee or using a temporary help agency, aside
from looking at the cost, what should you know about the overall
company that you're dealing with to avoid having to pay any
withholding or employment taxes?
Answer: That you are dealing with a financially secure and reputable
company.
●● Compare a temporary help agency employee and a leased employee
Answer: - Temporary , set wage, right to hire or fire
- Leasing , client pays a fee to cover payrolkl
●● What are the two categories of statutory non-employees?
APA ACTUAL TEST QUESTIONS WITH
COMPLETE ANSWER KEY
●● T/F: An accountant who provides bookkeeping and payroll services
to several local businesses and works at her own office is an independent
contractor.
Answer: True
●● T/F: Telemarketers working under the direction of a company are
usually independent contractors.
Answer: False
●● T/F: Workers hired through a temporary help agency are not
employees of the client company.
Answer: True
●● T/F: Full-time life insurance salespersons are always considered
statutory employees and are never subject to FUTA tax.
Answer: False. Their earnings must consist solely of commissions to be
exempt from FUTA.
,●● T/F: If the employer has the right to control what work will be done
and how that work will be done, an employer- employee relationship
exists under the common law test.
Answer: True
●● What does a social security card prove in terms of an employee's
work authorization IRCA?
Answer: It is not proof of Identity.
●● What is the name of the program employers can use to verify the
employment authorization status of new hires with W.S Citizenship and
Immigration Services?
Answer: E-Verify
●● When must employers report newly hired employees under the
federal new hire reporting requirements?
Answer: 20 calendar days
●● What information must be reported by an employer for each new hire
under federal new hire reporting requirement?
Answer: Name, address, Social Security number, First day worked
,●● Which factors are considered not to be important by the IRS in
making a worker classification determination because of changes in the
workplace over the years?
Answer: - part time / full time
- location
- hours worked
●● Why would many employers rather use workers who are not
employees to perform services for them?
Answer: They don't have to withhold taxes or provide benefits
●● What factors do the courts and the Department of Labor consider
when making an employment status determination under the FLSA?
Answer: - Is work part of the business
- make a profit or loss
- investment of tools and material
- work requires special skills
- How permanent is the working relationship
- control over employee
●● When a client company contracts with a certified PEO, who is
responsible for withholding and /or paying federal income, social
security, Medicare, and FUTA taxes on the wages the PEO pays to the
employees at the client's worksite?
, Answer: The PEO is responsible for all taxes and wages due employee
●● What is form I-9 used for?
Answer: Verify legal right to work in US
●● What are the three parts of the ABC test, and what is the test used to
determine?
Answer: - Worker free from control
- Work performed outside Company Business
- Independent trade
●● When leasing an employee or using a temporary help agency, aside
from looking at the cost, what should you know about the overall
company that you're dealing with to avoid having to pay any
withholding or employment taxes?
Answer: That you are dealing with a financially secure and reputable
company.
●● Compare a temporary help agency employee and a leased employee
Answer: - Temporary , set wage, right to hire or fire
- Leasing , client pays a fee to cover payrolkl
●● What are the two categories of statutory non-employees?
