CPP Certified Payroll Professional APA Master Exam Practice 406 Questions with Verified Answers,100% CORRECT

CPP Certified Payroll Professional APA Master Exam Practice 406 Questions with Verified Answers Form SS-8 - CORRECT ANSWER Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding Form W-9 - CORRECT ANSWER First, it is used by third parties to collect identifying information to help file information returns with the IRS. The form is never actually sent to the IRS, but is maintained by the person who files the information return for verification purposes. The information on the Form W-9 and the payment made are reported on a Form 1099. The second purpose is to help the payee avoid backup withholding. The payer must collect withholding taxes on certain reportable payments for the IRS. However, if the payee certifies on the W-9 they are not subject to backup withholding they generally receive the full payment due them from the payer. This is similar to the withholding exemptions certifications found on Form W-4 for employees. Form SS-5 - CORRECT ANSWER Apply for an original Social Security card Apply for a replacement Social Security card Change or correct information on your Social Security number record Form SS-4 - CORRECT ANSWER Application for Employer Identification Number (EIN) Accounting equation (Balance Sheet) - CORRECT ANSWER Assets = Liabilities + Capital Assets - Liabilities = (Shareholders' or Owners' Equity) Asset (Debit or Credit Normal Balance?) - CORRECT ANSWER Debit Expense (Debit or Credit Normal Balance?) - CORRECT ANSWER Debit Liability (Debit or Credit Normal Balance?) - CORRECT ANSWER Credit Capital (Debit or Credit Normal Balance?) - CORRECT ANSWER Credit Owners Equity (Debit or Credit Normal Balance?) - CORRECT ANSWER Credit Revenue (Debit or Credit Normal Balance?) - CORRECT ANSWER Credit Escheat laws - CORRECT ANSWER Refer to unclaimed property obligations. Companies who issue checks-for wages, payroll, employee commissions, returnable garnishments, deferred compensation, payroll services or bonuseshave a potential (and probable) unclaimed property obligation. Schedule D (Form 941) - CORRECT ANSWER to explain certain discrepancies (caused by acquisitions, statutory mergers, and consolidations) between Forms W-2, Wage and Tax Statement (Copy A), and Forms 941, Employer's QUARTERLY Federal Tax Return, for the totals of social security wages, Medicare wages and tips, social security tips, federal income tax withheld, and advance earned income credit (EIC) payments Workweek for 14 and 15-year-olds - CORRECT ANSWER Outside school hours, and on school days including Fridays, no more than 3 hours. No more than 8 hours on a non-school day. When school is in session, no more than 18 hours per week. No more than 40 hours during a week when school is out. Between the hours of 7 a.m. And 7 p.m, extended to 9 p.m. Between June 1 and Labor Day. 1) Which form is used for Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding? A. Form I-9 B. Form SS-4 C. Form SS-5 D. Form SS-8 - CORRECT ANSWER D 2) What amount must an independent contractor be paid for services rendered before an employer is obligated to give them a 1099-MISC? A. Once total reaches $600 or more B. Total payments reach $600 or more for company's fiscal year C. Total payments reach $600 or more for calendar year D. Any individual payment makes during calendar year exceeding $600 - CORRECT ANSWER C 3) Qualified real estate agents and direct sellers are which of the following? A. Statutory Employees B. Statutory Nonemployees C. Employees D. Independent Contractors - CORRECT ANSWER B 4) Under the common law test, the IRS examiners are to group the evidence they gather into three general types or "categories" Which of the following is not one of them? A. Behavioral control B. Financial control C. Location of work D. Relationship of the parties - CORRECT ANSWER C 5) Which of the following is not regulated by the FLSA? A. Child labor B. Overtime pay C. Minimum Wage Rates D. 8 hour work day - CORRECT ANSWER D 6) Agent-drivers, commission-drivers and full-time life insurance salespersons are which of the following? A. Statutory Employees B. Statutory Nonemployees C. Employees D. Independent Contractors - CORRECT ANSWER A 7) There are three parts of the ABC test, which is not one of them? A. Business-unusual and/ or away B. Risk of loss C. Customarily independent contractor D. Absence of control - CORRECT ANSWER B 8) Under the federal new hire reporting requirement how many days does an employer have after hire date? A. 10 days B. 20 days C. 30 days D. 40 days - CORRECT ANSWER B 9) What is Form I-9 used for? A. Application for Employer Identification Number B. Determination of Employee Work Status C. Application for IRS Individual Taxpayer D. Employment Eligibility Verification - CORRECT ANSWER D 10) Under the reasonable basis test, which of the following does not support an employer's treatment of a worker as an independent contractor? A. Past IRS employment tax audit B. Published IRS rulings C. Place of work D. Private letter rulings - CORRECT ANSWER C 11) What does FLSA stand for? A. Federal Labor Standards Act B. Fair Labor Standards Act C. Federal Labor Standards Agency D. Fair Labor Standards Agency - CORRECT ANSWER B 12) Which of the following is not covered under the FLSA? A. Regulate how often employees must be paid B. Mandates equal pay for equal work C. Requires recordkeeping by employers D. sets the minimum wage and overtime rates employees must receive for their work - CORRECT ANSWER A 13) Who enforces the Federal Wage-Hour Law? A. Individual States B. IRS C. EEOC D. DOL - CORRECT ANSWER D 14) Who enforces the equal pay provisions? A. Individual States B. IRS C. EEOC D. DOL - CORRECT ANSWER C 15) Which is not one of the White Collar Exemption? A. Administrative B. Executive C. Management D. Professional employees - CORRECT ANSWER C 16) For overtime pay Which one is included in the regular rate? A. Discretionary bonuses B. Nondiscretionary bonuses C. Gifts D. Reimbursed expenses - CORRECT ANSWER B 17) For calculation of overtime pay Which one is not included in the regular rate? A. Supplemental disability payments B. On-call pay C. Retroactive pay D. Vacation pay - CORRECT ANSWER D 18) A computer professional must be paid at least what per hour to be exempt from overtime requirements under the FLSA? A. Minimum wage per hour B. 21.55 per hour C. 27.63 per hour D. 29.67 per hour - CORRECT ANSWER C 20) What is the federal minimum wage rate? A. 4.25 B. 5.85 C. 6.55 D. 7.25 - CORRECT ANSWER D 21) So long as the employee's tips are enough to make up the remainder of the minimum hourly wage What is the federal minimum wage for tipped employee? A. 2.01 B. 2.07 C. 2.09 D. 2.13 - CORRECT ANSWER D 22) What is the time limit on filing an FLSA complaint with the Wage and Hour Division? A. 1 or 2 years B. 2 or 3 years C. 3 or 4 years D. 4 or 5 years - CORRECT ANSWER B 23) A "working condition" fringe benefit is? A. Discount offered employees that's not more than 20% of the price for services offered to customers B. A service or an item of such small value as to make accounting for the benefit unreasonable C. A service the employee could deduct as a business expense if he or she had paid for it D. Services provided free or at reduced rates by an - CORRECT ANSWER C 24) A "de minimis" fringe benefit is? A. Discount offered employees that's not more than 20% of the price for services offered to customers 20% of the price for services offered to customers B. A service or an item of such small value as to make accounting for the benefit unreasonable C. A service the employee could deduct as a business expense if he or she had paid for it - CORRECT ANSWER B 25) A "Qualified employee discount" is? A. Discount offered employees that's not more than 20% of the price for services offered to customers 0 B. A service or an item of such small value as to make accounting for the benefit unreasonable C. A service the employee could deduct as a business expense if he or she had paid for it - CORRECT ANSWER A 26) A "No-additional-cost services" is? A. Discount offered employees that's not more than 20% of the price for services offered to customers B. 20% of the price for services offered to customers C. A service or an item of such small value as to make accounting for the benefit unreasonable D. A service the employee could deduct as a business expense if he or she had paid for it - CORRECT ANSWER D 27) What is the maximum amount excluded from income by law in 2018 for employer-provided parking? A. $120.00 B. $125.00 C. $230.00 D. $260.00 - CORRECT ANSWER D 28) What is the maximum amount excluded from income by law in 2018 for Transit passes? A. $120.00 B. $260.00 C. $230.00 D. $255.00 - CORRECT ANSWER B 29) What is the maximum per round trip an employee may receive under commuting valuation method? A. $6.00 B. $3.00 C. $1.50 D. 0 - CORRECT ANSWER B 30) Expenses on a job-related move can be considered deductible and reimbursements for them excluded from income when what is met? A. New workplace must be at least 50 miles farther from the employee's old residence than the previous workplace was B. 12 months immediately following move, must work fulltime for at least 39 weeks in the general location of the new workplace C. At least 50 miles from old workplace then new D. Both A and B - CORRECT ANSWER D 31) An employee's date of birth is April 15, 1974 What age would be used for calculating group term life insurance for January 2012? A. 27 B. 28 C. 37 D. 38 - CORRECT ANSWER D 32) An employee is temporarily disabled and is being paid by a third party who is not an agent To request federal income tax withheld from third-party sick pay, which of the following form must be completed? A. Form W-4 B. Form W-4P C. Form W-4S D. Form W-5 - CORRECT ANSWER C 33) On what form must wages be reported on if an employee dies after receiving a paycheck but before cashing it and the check is reissued to the employee's personal representative? A. Form W-2D B. Form W-2 C. Form 1099-MISC D. Form 1099-R - CORRECT ANSWER B 34) Wages paid after the year of death are subject to what withholding taxes? A. Social Security, Medicare, Federal income tax and FUTA B. Social Security, Medicare and FUTA C. Social Security, Medicare D. None - CORRECT ANSWER D 35) The IRS approved rate for employer provided fuel for 2018 is? A. 5 cents per mile B. 5.5 cents per mile C. 55.5 cents per mile D. 58.5 cents per mile - CORRECT ANSWER B 36) Which of the following is not a recordkeeping requirement for business use of company provided vehicles? A. Trips mileage B. Trips date C. Trips usage of car phone D. Business purpose of the trip - CORRECT ANSWER C 37) Wages paid after the year of death are report on which of the following form? A. Form W-2D B. Form W-2 C. Form 1099-MISC D. Form 1099-R - CORRECT ANSWER C 38) The IRS standard business mileage rate for 2018 is? A. 5.5 cents per mile B. 51 cents per mile C. 54.5 cents per mile D. 58.5 cents per mile - CORRECT ANSWER C 43) What is the maximum amount of employer provided group term life insurance that can be excluded from an employee's income? A. One times their annual salary B. $2,000 C. $50,000 D. $100,000 - CORRECT ANSWER C 44) Which of the following is a "de minimis" fringe and is excluded from taxable earnings? A. $25 gift certificate for Rainbow Foods B. $25 Target gift certificate C. $25 company check D. Gift certificate (e.g. Ham, Turkey) - CORRECT ANSWER D 46) Under the IRC, which section regulates cafeteria plans? A. 123 B. 125 C. 127 D. 129 - CORRECT ANSWER B 47) What is the maximum amount for 2018 that an employee may elect to defer to a 401 (k) or 403 (b) plan? A. $15,000 B. $15,500 C. $16,500 D. $18,500 - CORRECT ANSWER D 48) What is the maximum amount for 2018 that an employee may elect to defer to a 457 plan? A. $15,500 B. $16,500 C. $18,500 D. $19,500 - CORRECT ANSWER C 49) What is the maximum amount for 2018 that an employee may elect for FSA dependent care? A. $2,400 B. $5,000 C. $7,500 D. No Limit - CORRECT ANSWER B 50) An employer with 120 participants offering a cafeteria plan must annually file what form? A. Suspended in 2002 no filing needed B. Form 5500 C/R C. Form 5500 D. Form 5550 C/R - CORRECT ANSWER A 51) Which of the following can not be part of a cafeteria plan? A. Group-term life insurance B. Qualified adoption assistance C. Cash D. Medical Savings Accounts - CORRECT ANSWER D 52) Under a cafeteria plan, pretax contribution to a 401 (k) are subject to what federal taxes? A. FICA, FUTA and FIT B. FICA and FUTA C. FICA D. None - CORRECT ANSWER B 53) CODA stand for what? A. Cash or Deferred Account B. Cost of Dependent Adoption C. Cash or Deferred Arrangement D. Cafeteria or Deferred Account - CORRECT ANSWER C 54) Who is at risk of forfeiture in a cafeteria plan health care FSA? A. No one is at risk B. Employee only C. Employer only D. Both employee and employer - CORRECT ANSWER D 55) What does FSA stand for? A. Federal Savings Accounts B. Flexible Spending Arrangement C. Fair Standards Act of 1985 D. Federal Service Agency - CORRECT ANSWER B 56) Under a 125 plan pretax deductions are subject to what federal taxes? A. FICA, FUTA and FIT B. FICA and FUTA C. FICA D. None - CORRECT ANSWER D 57) State and local government employees would participate in which of the following deferred plans? A. 401 (k) B. 403 (b) C. 408 D. 457 - CORRECT ANSWER D 58) Public schools employees would participate in which of the following deferred plans? A. 401 (k) B. 403 (b) C. 408 D. 457 - CORRECT ANSWER B 59) Which of the following employer stock purchase plans might be included in a qualified 401 (k) plan? A. ERISA B. ESOP C. IRA D. SEP - CORRECT ANSWER B 60) What does ADP stand for? A. Automatic Deposited Paycheck B. Automated Data Process C. Actual Defined Pension D. Actual Deferral Percentage - CORRECT ANSWER D 61) The defined benefit plans are generally administer by which department? A. Human Resources B. Payroll C. Employment D. Benefits - CORRECT ANSWER D 62) The Family and Medical Leave Act of 1993 is administered and enforced by what department? A. Internal Revenue Service B. Fair Labor Standards Act C. Department of Labor D. Equal Employment Opportunity Commission - CORRECT ANSWER C 63) Which of the following may not be regulated by state law? A. How often employees must be paid B. What employers must do with unclaimed paychecks C. How soon employees must be paid after their employment is terminated D. What minimum wage an employee must receive - CORRECT ANSWER D 65) Which of the following is not a advantage of the direct deposit system to the employer? A. Direct deposit cannot be made mandatory in most states B. Prevents lost and stolen checks C. employees do not have to take time out of their work day to cash or deposit their paycheck D. Better control of check stock - CORRECT ANSWER A 66) Which of the following is not a disadvantage of the direct deposit system to the employer? A. Direct deposit is not a paperless system B. Cannot dictate the bank that the employee uses C. Do not have to file/store cashed checks and related documents D. Loss of interest on payroll funds before paychecks clear - CORRECT ANSWER C 67) What are escheat laws? A. Federal laws governing direct deposit B. Federal laws governing unclaimed wages as abandoned property C. State laws governing direct deposit D. State laws governing unclaimed wages as abandoned property - CORRECT ANSWER D 69) Request for Taxpayer Identification Number and Certification is submitted on which form? A. Form SS-4 B. Form SS-8 C. Form W-7 D. Form W-9 - CORRECT ANSWER D 70) What is the 2018 social security wage base? A. $4,624.20 B. $106,800 C. $128,400 D. No maximum amount - CORRECT ANSWER C 71) Verifying Social Security Numbers The SSA has three verification methods available to employers Which of the following is not one of them? A. Fax B. Phone C. Paper list D. Magnetic tape - CORRECT ANSWER A 72) For employee's who do not have an SSN they can get one by submitting "Application for a Social Security Card" Which of the following is the correct form? A. Form SS-4 B. Form SS-5 C. Form SS-8 D. Form SSA-7004 - CORRECT ANSWER B 73) When supplemental wage payment is paid separately or clearly indicated when add to regular wages What is the flat withholding rate for 2018? A. 22% B. 27% C. 28% D. 30% - CORRECT ANSWER A 74) What is the percentage on "backup withholding" for 2018? A. 25% B. 27% C. 28% D. 35% - CORRECT ANSWER C 75) Employees who want to take advantage of advance EIC must file an Earned Income Credit Advance Payment Certificate annually Which of the following is the correct form? A. Form W-9 B. Form W-5 C. Form W-2 D. Not available in 2018 - CORRECT ANSWER D 76) Which of the following would not be a supplemental wage payment? A. Vacation pay B. Backpay awards C. Retroactive pay D. Bonuses - CORRECT ANSWER A 77) Which of the following can a employer refuse to do? A. Withhold an IRS levy B. Withhold Support deduction C. Change their name until a new social security card, with new name is presented 0 - CORRECT ANSWER C 78) A new hire does not submit payroll a W-4 by their first payday, they are married and have three children What withholding status do you use when calculating his withholding? A. Married with 3 allowances B. Married with 0 allowances C. Single with 4 allowances D. Single with 0 allowances - CORRECT ANSWER D 79) Generally an employer must file Form 940 by what date, of the year after the FUTA liability was incurred? A. January 31 B. February 28 C. April 1 D. April 30 - CORRECT ANSWER A 80) What is the FUTA taxable wage base for 2018? It is also the SUI minimum taxable wage base A. $7000 B. $7500 C. $8000 D. $9000 - CORRECT ANSWER A 81) What is the effective FUTA tax rate for 2018? A. .6% B. .8% C. 5.4% D. 6.0% - CORRECT ANSWER A 82) For depositing and paying FUTA tax If due date falls on a weekend or federal/state holiday when is the payment due? A. Add to next deposit B. At the earliest time possible C. One business day earlier D. Next business day - CORRECT ANSWER D 83) How many weeks can a terminated employee collect unemployment without filing an extension? A. 6 Months B. 26 weeks C. 39 weeks D. 52 weeks - CORRECT ANSWER B 84) Which of the following is not one of methods used to determine an employer's unemployment insurance experience rating? A. Benefit ratio B. Benefit-wage ratio C. Payroll ratio D. Reserve ratio - CORRECT ANSWER C 85) Which of the following is not one of the types of employment that are exempt from FUTA? A. Life insurance agents who receive only commissions B. Tipped employees C. Work performed by statutory nonemployees D. Work on a foreign ship outside the U.S. - CORRECT ANSWER B 86) What is the credit percentage if an employer receives a full credit on FUTA for 2018? A. .6% B. .8% C. 5.4% D. 6.0% - CORRECT ANSWER C 88) Employers are assigned one of two depositor status classifications for Payroll Tax Deposit Rules Which of the following is correct? A. Quarterly or monthly B. Monthly or weekly C. Monthly or semiweekly D. Monthly or semimonthly - CORRECT ANSWER C 89) What is the lookback period for calendar year 2016 for Payroll Tax Deposit Rules? A. July 1, 2014 - June 30, 2015 B. January 1, 2014 - December 31, 2014 C. Company previous fiscal year D. Lookback period is 12 months - CORRECT ANSWER A 90) What amount of employment tax liability must an employer reach before the one-day deposit rule is in effect? A. $25,000 or more B. $50,000 or more C. $100,000 or more D. $150,000 or more - CORRECT ANSWER C 91) The shortfall rule allows an employer to deposit what percentage of their payroll tax liability without a penalty? A. Must be 100% B. 98% C. 95% D. 90% - CORRECT ANSWER B 92) Which of the following form is use to report backup withholding? A. Form 940 B. Form 941 C. Form 941c D. Form 945 - CORRECT ANSWER D 93) What happens when a monthly depositor accumulates $100,000 in tax liability on any day during a month? A. Is a one day depositor the rest of the year B. Remains a monthly depositor, but need to deposit on the next business day anytime accumulates $100,000 in tax liability C. Becomes semiweekly for the rest of the year D. Becomes semiweekly for the rest of current year and entire next calendar year, also needs to deposit on next business day - CORRECT ANSWER D 94) How long must an employer keep undeliverable copies of employee's Form W-2? A. Three years B. Four years C. Five years D. Seven years - CORRECT ANSWER B 95) An employee is terminated on 7/1/16 The following week a request in writing was received requesting his 2016 Form W-2 How long does the employer have to send it out? A. 10 days of the request B. 20 days of the request C. 30 days of the request D. January 31, 2013 - CORRECT ANSWER C 96) Who would use Form 941-M? A. Semiweekly depositors B. Monthly depositors C. Both A and B D. Employers that fail to withhold or deposit taxes or file returns on time - CORRECT ANSWER D 97) Which of the following is used to deposit withheld federal income and employment taxes? A. Form 8809 B. Form 941 C. Form 940 D. EFTPS - CORRECT ANSWER D 98) All 2016 Copy A of Form W-2 and Form W-3 must be filed with the SSA by what date following the calendar year in which the wages were paid? A. January 31 B. By the end of February C. March 31 D. April 1 - CORRECT ANSWER B 99) If an employer mailed their payroll tax deposits through the US Postal Service, the deposits would be considered timely if postmarked at least how many days before due date? A. One day B. Two days C. Has to be receive by due date or penalties will apply D. As long as it has the due day or earlier no penalties apply - CORRECT ANSWER B 100) When are employers required to mail copies of Form W-4 to the IRS? A. Claims more than 10 withholding allowances B. Claims exempt from withholding C. IRS request it in writing D. Claims 10 withholding allowances and is single - CORRECT ANSWER C 101) When is an employee not subject to FICA tax? A. Over age of 70 B. Over age of 65 C. Over age of 59 1/2 D. None of the above - CORRECT ANSWER D 102) What does OASDI stand for? A. Old Age Survivors and Disability Insurance B. Old Age Survivors and Disability Income C. Old Age Severance and Disability Insurance D. Old Age Severance and Disability Income - CORRECT ANSWER A 103) Non qualified plans go in which box on the Form W-2? A. Box 8 B. Box 9 C. Box 10 D. Box 11 - CORRECT ANSWER D 104) In which box on Form W-2 should allocated tips be reported? A. Box 1 B. Box 1, 3 and 5 C. Box 1, 5 and 7 D. Box 8 - CORRECT ANSWER D 105) An employee's gross for the year is 30,000 In which box on Form W-2 must an employer provided dependent care assistance be included when it exceeds $5,000? A. Box 1 and 10 B. Box 1, 3 and 5 C. Box 10 D. Box 1, 3, 5 and 10 - CORRECT ANSWER D 106) Group term life insurance over $50,000 is reported in Box 12 on Form W-2 What code is also included? A. Code A B. Code C C. Code L D. Code P - CORRECT ANSWER B 107) The IRS will send an employer a federal tax levy on which of the following form? A. Form 668-D 4 part B. Form 668-D 6 part C. Form 668-W 4 part D. Form 668-W 6 part - CORRECT ANSWER D 108) Who sets the maximum amount that can be withhold from an employee's wages for child or spousal support? A. IRS B. FLSA C. CCPA D. Individual States - CORRECT ANSWER C 109) If an employee is not supporting another child and/or spouse and is not in arrears, what is the maximum amount of disposable earnings that can be withheld? A. 50% B. 55% C. 60% D. 65% - CORRECT ANSWER C 110) An employer may charge the employee an administrative fee for processing the wage withholding order each payperiod Who sets the maximum amount for the fee? A. IRS B. FLSA C. CCPA D. Individual States - CORRECT ANSWER D 111) What is the maximum amount an employee's disposable earnings that can be garnished to pay a debt? A. 25% B. 30% C. 65% D. 75% - CORRECT ANSWER A 113) Which of the following is subtracted from earnings to calculate disposable earnings? A. All active deductions B. All deductions required by law C. Union Dues D. Life insurance premiums - CORRECT ANSWER B 114) Which of the following requires an employee's signature? A. IRS levy B. Child support withholding order C. Federal taxes D. Company loan repayment deduction - CORRECT ANSWER D 115) If all the following were received at the same time which one would take the highest priority? A. Child support B. Student Loans C. Garnishments D. IRS tax levy - CORRECT ANSWER A 116) How long must an employer retain an employees W-4 A. Two years after due date of the tax return B. Three years after due date of the tax return C. Four years after due date of the tax return D. Five years after due date of the tax return - CORRECT ANSWER C 117) ADEA requires employer to retain records of an employee's name, address, date of birth, occupation, pay rate and compensation for how long? A. Two years B. Three years C. Four years D. Five years - CORRECT ANSWER B 118) FLSA requires certain records to be kept by all covered employers for all employees and retained for how many years? A. Two years B. Three years C. Four years D. Two or three years - CORRECT ANSWER D 119) Form I-9 must be made available for inspection by the Department of Labor within how many days of a request? A. Three days B. Four days C. Five days D. As soon as they arrive - CORRECT ANSWER A 120) Records required by the ADEA must be kept at the employee's worksite or a central recordkeeping location If the records are kept at a central location how long does an employer have to turnover the records for inspection by EEOC? A. 24 hours B. 48 hours C. 72 hours D. As soon as they arrive - CORRECT ANSWER C 121) Which of the following is not an expense account? A. Wages payable B. Employer paid benefit costs C. Maintenance for computers D. Office supply costs - CORRECT ANSWER A 122) Of the following accounts which does not have a normal balance as a debit? A. Income Distributed B. Expense C. Asset D. Equity - CORRECT ANSWER D 123) Of the following accounts which is not a liability account? A. Accounts payable B. Contributions owed to a company benefit plan C. Employer share of payroll taxes D. Union dues deducted from pay but not yet paid to union - CORRECT ANSWER C 124) Which of the following account does not have a normal balance as a credit? A. Revenue B. Expense C. Contributed Capital D. Equity - CORRECT ANSWER B 125) Which of the following is not part of the balance sheet? A. Net earnings B. Deferred assets C. Long term liabilities D. Plant, property and equipment - CORRECT ANSWER A 126) Of the following which is not on the income statement? A. Shareholder's equity B. Earnings per share C. Non-operating expenses D. Gross margin on sales - CORRECT ANSWER A 127) Which of the following is classified as a record of original entry? A. General ledger B. Trail balance C. Journal D. Posting - CORRECT ANSWER C 128) Entering an amount on the left side of an account is called? How many hours are paid at the overtime rate? A. Increasing a revenue account B. Decreasing a liability account C. Debiting the account D. Crediting the account - CORRECT ANSWER C 129) A journal entry containing more than one debit or more than one credit is called? A. T-account B. Compound entry C. Double entry D. Transaction - CORRECT ANSWER B 130) An accounting period is which of the following? A. Month B. Quarter C. Year D. Any length of time covered by an income statement - CORRECT ANSWER D 131) The definition of an expense is which of the following? A. Debts of a business that have yet to be paid B. Resources acquired by a business that are consumed by the business C. Purchase of goods or services consumed during the accounting period - CORRECT ANSWER C 132) The definition of a liability is: A. Debts of a business that have yet to be paid B. Resources acquired by a business that are consumed by the business consumed by the business C. Purchase of goods or services consumed during the accounting period - CORRECT ANSWER A 133) The definition of equity is: A. Debts of a business that have yet to be paid B. Resources acquired by a business that are consumed by the business C. Purchase of goods or services consumed during the accounting period D. Result of subtracting liabilities from assets - CORRECT ANSWER D 134) For an expense that was accrued for last month what must an accounting department do the next month? A. Adjustment entry B. Nothing C. An accrual reversal D. Debit cash, credit expense - CORRECT ANSWER C 135) What is the definition of an asset? A. Debits of a business that have yet to be paid B. Resources acquired by businesses that are consumed by the business C. Purchase of goods or services, or costs incurred on a one time or short term basis D. Result of subtracting liabilities from assets - CORRECT ANSWER B 136) What does it mean when two systems are interfaced? A. Printers, modems, external drive B. Data reside on a server C. Powerful personal computers D. Sharing data needed by both - CORRECT ANSWER D 139) What is not a disadvantage of a service bureau? A. Possibly high variable costs B. Reduction in processing delays C. Responsibility for filing errors D. Little time for change - CORRECT ANSWER B 140) What is an environment called where all computers are physically attached to each other and data is transmitted at high speeds over short distances? A. Network B. Modem C. LAN D. WAN - CORRECT ANSWER C 141) What is not an advantage of a service bureau? A. New services can be added B. Fewer research problems C. Control over security D. Low processing costs - CORRECT ANSWER C 142) What is not a disadvantage of an in-house microcomputer network? A. Keep system up to date B. Data sharing C. Network manager needed D. Initial installation cost - CORRECT ANSWER B 143) What is not an advantage of off the shelf software? A. Small employers only B. Low cost C. Ease of use D. Use it right away - CORRECT ANSWER A 144) What is not a disadvantage of vendor supplied software packages? A. Improper fit B. Specific needs may not be met C. User group networking D. Training - CORRECT ANSWER C 145) What is not a advantage of customized software? A. Update responsibility B. Increased flexibility C. Control D. Special needs - CORRECT ANSWER A 146) What is not part of selecting a computerized payroll system? A. Analyze B. Build a project team C. RFP D. Putting controls into the process - CORRECT ANSWER D 147) Which of the following is not part of a system edit? A. Report with negative net pay B. Report with active employees with no pay C. Report with union dues payable D. Report with employees over 40 hours - CORRECT ANSWER C 148) What should not be a part of the system documentation? A. Schedules B. Adjustment and corrections entry C. Reports D. Company policies - CORRECT ANSWER D 149) Which of the following should be part of a disaster recovery plan? A. Arrange office equipment rental B. Keep backup files off premises C. Communicate the plan D. All the above - CORRECT ANSWER D 150) Which internal control method requires employees to show identification before getting paid, also known as stopping phantom employees? A. Rotating jobs B. Physical payouts C. System edits D. Verifying - CORRECT ANSWER B 151) What is not part of the system security? A. System access B. Backing up data C. Checking for adequate power D. Secure files - CORRECT ANSWER C 152) There are four different management styles according to Hersey and Blanchard Which of the following is known as high task/high relationship? A. Manager controls the job and procedures and will coach employees B. Little control sought by the manager; good deal of mutual trust C. Most jobs delegated; little personal contact D. Controls staff with little feedback - CORRECT ANSWER A 153) Which of the following management theory characterizes the Japanese style? A. Theory W B. Theory X C. Theory Y D. Theory Z - CORRECT ANSWER D 154) Which of the following is not a planning concern? A. Evaluating the costs B. Delegating tasks C. Defining the objectives D. Defining time - CORRECT ANSWER B 155) Which of the following is a basic management skill that involves setting goals? A. Staffing B. Planning C. Controlling D. Directing - CORRECT ANSWER B 156) A Manager should never delegate to his or her subordinate which of the following? A. Responsibility B. Authority C. Accountability D. Reporting - CORRECT ANSWER C 157) Which of the following is not currently a popular management theory? A. Theory Y B. Theory X C. Theory W D. Situational Leadership - CORRECT ANSWER C 158) Which management skill is have the right person with the right job? A. Staffing B. Planning C. Controlling D. Directing - CORRECT ANSWER A 159) A manager who takes a negative view of his or her employees is best categorized as what management theory? A. Theory Y B. Theory X C. Theory W D. Theory Z - CORRECT ANSWER B 160) Of the following which is not one of the three "P" of management? A. Payroll B. People C. Process D. Proficiency - CORRECT ANSWER A 161) Communicating, motivating and providing guidance to ones employees belongs to which of the management skill? A. Staffing B. Planning C. Controlling D. Directing - CORRECT ANSWER D 162) During the planning and organizing process which of the following activities need not be include? A. Subtasks B. How each part is processed C. Goals and objectives D. The time frame - CORRECT ANSWER B 163) There are four communication skills managers must possess when directing employees which is not one of them? A. Providing feedback B. Coaching C. Listening D. Controlling Performance - CORRECT ANSWER D 164) There are many different types of performance evaluation systems and formats and there are several elements that are generally found within them Which is not one of them? A. Employees who disagree with the evaluation are allowed to challenge it B. There are written guidelines for administering the evaluation system C. They make subjective conclusions in very broad terms D. Communicated clear and in writing to employees - CORRECT ANSWER C 165) Time management has four combinations of time categories Which of the following are you in a crisis mode and putting out fires? A. Not Urgent but Important B. Not Urgent and Not Important C. Urgent and Important D. Urgent but Not Important - CORRECT ANSWER C 167) There are four different management styles according to Hersey and Blanchard Which of the following is known as supporting or as low task/high relationship? A. Manager controls the job and procedures and will coach employees B. Little control sought by the manager; good deal of mutual trust C. Most jobs delegated; little personal contact D. Controls staff with little feedback - CORRECT ANSWER B 168) Stephen Covey's principle centered leadership has four interdependent dimensions which of the following is one of them? A. Security B. Guidance C. Wisdom D. All of the above - CORRECT ANSWER D 169) There are four different management styles according to Hersey and Blanchard Which of the following is known as Directing or as high task/low relationship? A. Manager controls the job and procedures and will coach employees B. Little control sought by the manager; good deal of mutual trust C. Most jobs delegated; little personal contact D. Controls staff with little feedback - CORRECT ANSWER D 170) What skill is not a management skill? A. Reporting B. Strategic planning C. Staffing D. Documentation - CORRECT ANSWER D 171) A US citizen or resident alien who lives and works outside the US A. Foreign employee B. Expatriate C. Alien D. Employee - CORRECT ANSWER B 172) US and foreign countries prevent double social security and Medicare taxation of US A. Treaty benefits B. Tax treaty impact C. Tax equalization plans D. Totalization agreements - CORRECT ANSWER D 173) Aliens who are not eligible for a social security number and must file a tax or information return, would request from the IRS an Individual Taxpayer Identification Number (ITIN) What form number is it? A. W-7 B. W-9 C. SS-5 D. SS-9 - CORRECT ANSWER A 174) Nonresident aliens must do which of the following when completing a Form W-4? A. Check only "Single" on line 3 B. Claim only one withholding allowance on line 5 C. Must write "NRA" above the dotted line in line 6 D. All the above - CORRECT ANSWER D 175) If a person has a "Green Card" which visa number is it? A. L-1 B. I-551 C. P-1 D. H-1 - CORRECT ANSWER B 176) Which of the following would not generally be a factor indicating an employee's domicile? A. Physical presence B. Where an employee votes C. Where the employee's immediate family lives D. State issuing the employee's driver's license - CORRECT ANSWER A 177) What amount of foreign earned income can be excluded from a US citizens or resident alien gross income, when working outside the US A. $104,100 B. $92,900 C. $91,500 D. $87,600 - CORRECT ANSWER A 178) What visa would a student have? A. T-1 B. S-1 C. Q-1 D. F-1 - CORRECT ANSWER D 179) Which of the following would not qualify as a foreign country under the 911 exclusion? A. Canada B. Spain C. Mexico D. Guam - CORRECT ANSWER D 180) On what income are US citizens and resident aliens subject to federal income tax? A. World-wide income B. U.S income C. Foreign income D. only amount over 101,300 - CORRECT ANSWER A Adoption Assistance - CORRECT ANSWER $13,840 Computer Professional Wage - CORRECT ANSWER $27.63 Dependent Care Limit - CORRECT ANSWER $5,000 ($2,500 married filing sep) Education Assistance - CORRECT ANSWER $5,250 Foreign Earned Income Exclusion - CORRECT ANSWER $104,100 Group Term Life Ins. Limit - CORRECT ANSWER $50,000 Moving Mileage - CORRECT ANSWER $.18 or 18 cents is taxable Opportunity Wage (EE under 20, 1st 90 days) - CORRECT ANSWER $4.25 Parking (Qualified) - CORRECT ANSWER $260 Social Security Rate (Employee) - CORRECT ANSWER 6.2% Social Security Wage Limit - CORRECT ANSWER 128,400 Supplemental Withholding $1M - CORRECT ANSWER 22% Supplemental Withholding $1M - CORRECT ANSWER 37% Tip Wage - CORRECT ANSWER $2.13 Tip Credit - CORRECT ANSWER $5.12 Transportation/Vanpool - CORRECT ANSWER $260 401k Maximum Contribution - CORRECT ANSWER $18,500 401k Catch-up contribution ( age 50) - CORRECT ANSWER $6,000 Standard Business Miles - CORRECT ANSWER .545 of 54.5 cents is taxable FUTA - CORRECT ANSWER 6% $7000 wage base From what taxes are cafeteria plan contributions generally exempt? A. SS, Medi, FIT, and FUTA B. FIT and SIT C. SS, Medi, FUTA, and SUI D. SS, Medi, FIT, and SIT - CORRECT ANSWER A. Social Security, Medicare, FIT, and FUTA In which boxes on the W-2 would you report the adoption assistance? A. Boxes 3, 4, 5, 6 B. Boxes 1, 2, 3, 4, 5, 6, 12 - Code T C. Boxes 3, 4, 5, 6, 12 - Code A D. Boxes 3, 4, 5, 6, 12- Code T - CORRECT ANSWER D. Boxes 3, 4, 5, 6, 12- Code T Which account is generally listed first on a corporate balance sheet? A. Investments in subsidiary companies B. Land and improvements C. Prepaid expenses D. Buildings and other property - CORRECT ANSWER C. Prepaid expenses What is a key advantage of processing payroll with a service provider compared to an in-house payroll system? A. No initial investment, no maintenance B. Enhanced communications capability C. Cost-effective resource and data sharing D. Convenience - CORRECT ANSWER A. No initial investment, no maintenance What kind of account is Accrued Salaries Payable? A. Asset B. Expense C. Liability D. Revenue - CORRECT ANSWER C. Liability An ER has received multiple attachments for an EE. The orders were received in the following sequence: Federal tax levy, consumer garnishment, and child support payment order. In which order are the attachments applied against the EE's wages? A. Federal levy, child support payment, consumer garnishment B. Child support payment, consumer garnishment, federal levy C. Child support payment, federal levy, consumer garnishment D. Federal levy, consumer garnishment, child support payment - CORRECT ANSWER A. Federal levy, child support payment, consumer garnishment Under the principle of double-entry bookkeeping, what can a credit to an account signify? A. An increase in an asset account B. A decrease in a capital account C. A decrease in a liability account D. An increase in a liability account - CORRECT ANSWER D. An increase in a liability account Bob passed away December 8, 2013. His annual salary was $80,000.00 and he had 80 hours of accrued vacation. His YTD earnings prior to his death were $74,000.00. His surviving spouse received the vacation payout on December 28, 2013. How did the payment to spouse impact Bob's 2013 W-2? A. Box 1 - $77,076.80; Box 3 - $77,076.80; Box 5 - $77,076.80 B. Box 1 - $74,000.00; Box 3 - $77,076.80; Box 5 - $77,076.80 C. Box 1 - $74,000.00; Box 3 - $74,000.00; Box 5 - $77,076.80 D. Box 1 - $74,000.00; Box 3 - $74,000.00; Box 5 - $74,000.00 - CORRECT ANSWER B. Box 1 - $74,000.00; Box 3 - $77,076.80; Box 5 - $77,076.80 When using vendor-supplied software to process payroll, what is considered a disadvantage? A. User group networking B. Ease of use C. Specific needs may not be met D. Initial installation costs - CORRECT ANSWER C. Specific needs may not be met Which W-2 Box 12 code is used for a 403(b) plan? A. F B. E C. D D. K - CORRECT ANSWER B. E (E for Education) What phase of in-house system design follows the Development Phase? A. Evaluation Phase B. Conceptual Definition Phase C. Analysis Phase D. User Testing Phase - CORRECT ANSWER D. User Testing Phase Which management theory reviews the differences between managers and leaders? A. Kotter B. Covey C. Hershey, Blanchard, Johnson D. Principle-Centered Leadership - CORRECT ANSWER A. Kotter Wages are paid on Wednesday, Mar 26, resulting in a deposit liability of $90,000. Wages are paid again on Thursday, Mar 27, resulting in a deposit liability of $12,000. Assume that Tuesday, Apr 15, is a nonbanking day. Under the semiweekly deposit rule, when are the deposits due? A. $102,000 is due on Friday, March 28 B. $102,000 is due on Wednesday March 26 C. $102,000 is due on Thursday March 27 D. $102,000 is due on Tuesday, April 1 - CORRECT ANSWER A. $102,000 is due on Friday, March 28 Which of following is one of the five steps of empowerment? A. Training B. Motivating C. Hiring the right employees D. Provide guidelines - CORRECT ANSWER D. Provide guidelines Which form notifies an ER that an EE's wages have been released from a levy? A. 843 B. 668 - W C. 668 - D D. 673 - CORRECT ANSWER C. 668 - D What journal entries are required to record $250,000.00 in salaries earned during the last week of July but paid in Aug? A. Debit salary expense; credit salary payable B. Debit salary payable; credit payroll checking C. Debit liabilities; credit salary expense D. Debit assets; credit salary expense - CORRECT ANSWER A. Debit salary expense; credit salary payable What is NOT a staffing concern? A. Recruiting and selecting B. Writing job descriptions C. Evaluating next year's staff budget D. Delegating tasks - CORRECT ANSWER C. Evaluating next year's staff budget When an ER compensates an EE with restricted stock, when is the compensation taxable? A. When the EE sells the stock B. At the end of the next quarter C. When the risk of forfeiture ends D. At the end of the year - CORRECT ANSWER C. When the risk of forfeiture ends An EE is having difficulty instituting state-mandated changes in handling child support payments. Although working overtime, they struggle with the legal requirements, and the program is not operational. What style of manager is most likely to be effective in handling the EE's performance gap? A. High task, low relationship B. Low task, low relationship C. High task, high relationship D. Low task, high relationship - CORRECT ANSWER C. High task, high relationship A student is exempt from SS and Medi tax when holding what visa? A. J only B. Q only C. F, J or Q D. F only - CORRECT ANSWER C. F, J or Q A manager who prefers facts over speculation and insists on real-world proof indicates the communication style defined as: A. Introspective B. Assertive C. Expressive D. Supportive - CORRECT ANSWER B. Assertive What journal entry is posted as a debit (DR)? A. $5,000.00 paycheck, posted to the checking account B. $10,000.00 withheld taxes, posted to liability account C. $15,000.00 deposit of withheld taxes, posted to liability account D. $55,000.00 payroll tax liability, posted to liability account - CORRECT ANSWER C. $15,000.00 deposit of withheld taxes, posted to liability account A semiweekly depositor's payday is on Friday the 10th. The following Wednesday, the company deposits 98% of its accumulated payroll tax liability. When is the shortfall due? A. With its quarterly return B. On or before its next deposit due date C. The first Wednesday or Friday, on or after the 15th of the following month D. On the next Wednesday or Friday after the first of the next month. - CORRECT ANSWER C. The first Wednesday or Friday, on or after the 15th of the following month What documents have a two-year retention period? A. The EE's occupation B. Work time schedules C. Hospital workers' agreements to 8/80 plan D. Form I-9 - CORRECT ANSWER B. Work time schedules A company has current assets of $150,000.00, other assets of $140,000.00, revenue of $590,000.00, expenses of $430,000.00, current liabilities of $105,000.00, and long-term liabilities of $135,000.00. What is the company owner's equity? A. $45,000.00 B. $50,000.00 C. $210,000.00 D. $55,000.00 - CORRECT ANSWER B. $50,000.00 Where do taxable Medicare wages get reported? A. On line 5c of Form 941 B. On line 2 of Form 941 C. In box 3 of Form W-2 D. In Part 1 of Form 940 - CORRECT ANSWER A. On line 5c of Form 941 Under the FLSA, all of the following records are required to be retained for at least three years from the last date they were in effect EXCEPT: A. Timecards B. Collective bargaining agreements C. Certificates authorizing the employment of minors D. Records showing total sales volume and goods purchased - CORRECT ANSWER A. Timecards The journal entries required to record federal income tax withheld are: A. Debit tax expense, credit federal income tax withheld B. Debit salary payable, credit federal income tax withheld C. Debit tax payable, credit cash D. Debit cash, credit tax expense - CORRECT ANSWER B. Debit salary payable, credit federal income tax withheld In which W-2 box must allocated tips be reported? A. Box 1,3, 5 B. Box 3, 5 C. Box 3, 5, 8 D. Box 8 - CORRECT ANSWER D. Box 8 On form W-2, what box is used to report wages, tips, and other compensation? A. Box 1 B. Box 10 C. Box 12 D. Box 14 - CORRECT ANSWER A. Box 1 When must payments made by a business to non-corporate independent contractors for services rendered be reported to the IRS? A. Payments exceed $1,000 for the calendar year B. Payments exceed $600 in the last 12 months C. Payments exceed $600 for the calendar year D. Payments exceed $1,500 for the calendar year - CORRECT ANSWER C. Payments exceed $600 for the calendar year All of the following duties would be included in the job description of an EE working in the payroll department EXCEPT: A. Data entry of payroll input B. Review source documents for proper authorization C. Reconciliation of payroll bank account D. Distribution of payroll related reports - CORRECT ANSWER C. Reconciliation of payroll bank account In a computer system, what is the organization of related data called? A. Job B. Record C. Field D. File - CORRECT ANSWER D. File After a new system has been selected and approved, what is the next step in the selection process? A. Specify scope B. Implementation C. Review D. Define requirements - CORRECT ANSWER B. Implementation A manager building a successful team must deal with EEs who have different personal styles. Each of the following styles is represented on a team other than: A. Contributors B. Controllers C. Collaborators D. Communicators - CORRECT ANSWER B. Controllers When a company purchases a computer on credit for $2,500, which of the following journal entries is made? A. Debit assets and debit liabilities B. Debit assets and credit liabilities C. Credit assets and debit liabilities D. Credit assets and credit owner's equity - CORRECT ANSWER B. Debit assets and credit liabilities What entries are required to record $45,000 in salaries earned between March 27 and March 30 but not paid until April 6? A. Debit salary payable, credit payroll checking B. Credit salary expense, debit salary payable C. Credit salary expense, debit assets D. Debit salary expense, credit salary payable - CORRECT ANSWER D. Debit salary expense, credit salary payable What is a warning or alert called that is built into the system that checks for errors and either corrects the error or notifies the operator that something may be wrong? A. Monitor edit B. System edit C. Control edit D. Procedure edit - CORRECT ANSWER B. System edit What effect do revenues have on accounts? A. Increasing expenses B. Decreasing liabilities C. Decreasing owner's equity D. Increasing owner's equity - CORRECT ANSWER D. Increasing owner's equity Once an EE has given authorization for EFT and the ER creates electronic pay transactions for deposit, where does the ER send them? A. ACH B. RDFI C. ODFI D. NACHA - CORRECT ANSWER C. ODFI How long must an EE's W-4 be retained by an ER? A. 3 years B. 10 years C. 4 years D. 5 years - CORRECT ANSWER C. 4 years The maximum hourly Tip Credit is: A. $6.55 B. $2.13 C. $3.72 D. $5.12 - CORRECT ANSWER D. $5.12 ($7.25 - $2.13 = $5.12) If an ER is unable to collect SS/MED due on an EE's reported Tip Income, the ER must: A. Pay the EE's share of SS/Medi B. Report the uncollected amount on the EE's W-2 in Box 12, coded "A" for SS, "B" for Medi C. Report the uncollected amount in Boxes 4 and 6 on the EE's W-2 D. Not report the uncollected amount until it is collected from the EE - CORRECT ANSWER B. Report the uncollected amount on the EE's W-2 in Box 12, coded "A" for SS, "B" for Medicare Which of the following groups best defines the term nonexempt under FLSA? A. A lower-paid class of EEs B. Hourly-paid workers only C. EEs who must be paid overtime D. A special class of EEs as determined by the ER - CORRECT ANSWER C. Employees who must be paid overtime ER's Annual Information Return of Tip Income and Allocated Tips is Form: A. 8027 B. 5500 C. 8109 D. SS8 - CORRECT ANSWER A. 8027 The amount of federal income tax that must be withheld from non-wage payments to an individual who has failed to provide a taxpayer identification number (TIN) is: A. 28% B. 31% C. 20% D. 25% - CORRECT ANSWER A. 28% Which of the following must be obtained from new EEs? A. Social Security Card B. W-4 C. I-9 D. W-2 - CORRECT ANSWER A. Social Security Card Moving expenses are reported on the W-2: A. Taxable portion in Box 1; Non-taxable portion in Box 12 B. Taxable portion in Boxes 1, 3, 5; Non-taxable portion in Box 12 C. Taxable portion in Box 1; Non-taxable portion in Box 12, coded "P" D. Taxable portion in Boxes 1, 3, 5; Non-taxable portion in Box 12, coded "P" - CORRECT ANSWER D. Taxable portion in Boxes 1, 3, 5; Non-taxable portion in Box 12, coded "P" Wages paid after death in the calendar year after the EE's death are taxable for: A. SS/Medi, FUTA, FITW B. SS/Medi, FUTA C. Not taxable for SS/Medi, FUTA, FITW D. SS/Medi only - CORRECT ANSWER C. Not taxable for Social Security/Medicare, FUTA, FITW The Annual Return/Report of EE Benefit Plan is Form: A. 8109 B. SS8 C. 5500 D. 8027 - CORRECT ANSWER C. 5500 Bob lives in Vermont and works in New York. Vermont has a state minimum wage of $8.06 per hour and New York has a state minimum wage of $7.25 per hour. What is the least hourly rate that Bob's ER may pay him? A. $8.06 B. $6.55 C. $7.25 (based on state where he's working, not living) D. Either A, B, or C - ER may choose - CORRECT ANSWER C. $7.25 (based on state where he's working, not living) Bob goes out on disability on May 1. His disability lasts until June 9. On May 29 Bob advises his ER that he will be taking a six month (unpaid) leave of absence. He is expected to return to work on Dec 4. He decides not to return to work and notifies his ER on Sept 5. On what date do COBRA rates become effective? A. May 29 B. June 9 C. September 5 D. December 4 - CORRECT ANSWER C. September 5 Federal law prohibits the employment of minors: A. Under the age of 14 under any circumstances B. Under the age of 14 except by a parent or in certain jobs C. Under the age of 15 under any circumstances D. Under the age of 16 except by parent or in certain jobs - CORRECT ANSWER B. Under the age of 14 except by a parent or in certain jobs Which of the following BEST describes a tax-free athletic facility benefit? A. Staffed by EEs and available to most of the EEs B. Located on ER owned property and used by EEs and their dependents C. Used for residential purposes and located on EE leased property D. Operated by local fitness company and primarily used by highly paid EEs - CORRECT ANSWER B. Located on employer owned property and used by employees and their dependents Once GTL Insurance coverage becomes taxable, it is subject to: A. FITW and FUTA only B. SS/Medi and FUTA only C. FITW only D. SS/Medi only - CORRECT ANSWER D. Social Security/Medicare only What is the annual limit of an EE Dependent Care Assistance account? A. $5,000 B. $7,500 C. No limit D. $8,000 - CORRECT ANSWER A. $5,000 ($2,500 married filing sep) Health Care Flexible Spending Arrangements can only reimburse medical expenses during the: A. Prior quarter B. Prior month C. Current month D. Coverage period - CORRECT ANSWER D. Coverage period At the beginning of the year an EE elects to buy medical and dental as a part of the company's cafeteria plan. During the year the EE has the option to change benefits: A. At any time B. Upon a qualifying event C. Never D. By filling out a new W-4 - CORRECT ANSWER B. Upon a qualifying event EFTPS stands for: A. Electronic Funding Tax Payer Services B. Employment Federal Tax Payment System C. Electronic Federal Tax Payment System D. Electronic Funds Transfer Payment System - CORRECT ANSWER C. Electronic Federal Tax Payment System Any property or service that an ER provides to an EE on an infrequent or sporadic base, if the value of such property or service is so minimal that accounting for it would be unreasonable or administratively impractical, is considered: A. Special accounting rule B. Working condition fringe C. De minimus fringe D. Non-cash compensation - CORRECT ANSWER C. De minimus fringe The Experience Rate System: A. Measures the amount of experience that EEs have in order to determine job placement B. Measures the unemployment claims activity of the ER for purposes of determining the ER's unemployment tax rate C. Measures the unemployment claims activity of the EE for purposes of determining the EE's unemployment tax rate D. Measures an EE's experience for purposes of determining promotion eligibility - CORRECT ANSWER B. Measures the unemployment claims activity of the employer for purposes of determining the employer's unemployment tax rate An annuity that provides retirement income for EEs of certain public schools and certain non-profit organizations is: A. 403(b) B. 457 C. 401(k) D. 414(h) - CORRECT ANSWER A. 403(b) A retirement plan in the form of an annuity or mutual fund for the EEs of public sector ERs is: A. 403(b) B. 457 C. 401(k) D. 414(h) - CORRECT ANSWER B. 457 An ER may exclude a business expense reimbursement from income when the EE's expenses meet which of the following requirements? A. Reimbursements are made with regular payroll. B. Expenses are substantiated and excess advances are returned timely. C. Expenses are business-related, substantiated, and excess advances are retained for future travel. D. Expenses are business-related, substantiated, and excess advances are returned timely. - CORRECT ANSWER D. Expenses are business-related, substantiated, and excess advances are returned timely. Bob is a real estate agent. His office expects him to be available in the office from 9:00 am to 3:00 p.m. and from 6:00 p.m. to 9:00 p.m. daily . Bob is: A. An independent contractor B. A statutory EE C. A statutory nonEE D. An EE - CORRECT ANSWER C. A statutory nonemployee Which is not true of an accountable plan? A. EEs must have paid or incurred deductible expenses while performing services as your EEs. B. Amounts paid to EEs under an accountable plan are wages and are subject to income tax withholding. C. EEs must adequately account to you for expenses within a reasonable period of time. D. EEs must return any amounts in excess of expenses within a reasonable period of time. - CORRECT ANSWER B. Amounts paid to employees under an accountable plan are wages and are subject to income tax withholding. Under a cafeteria plan how can EEs obtain or purchase benefits? A. Flex dollars - ER paid B. Salary reduction - pretax dollars C. Payroll deductions - post tax dollars D. All of the above - CORRECT ANSWER D. All of the above An EE receives serious car accident injuries on Feb 15, 2014 and does not return to work until Nov 1, 2014. Through what date must the ER withhold and pay SS, Medi and FUTA taxes on sick pay given to the EE by the ER? A. July 15, 2014 B. August 15, 2014 C. August 31, 2014 D. September 1, 2014 - CORRECT ANSWER C. August 31, 2014 ERISA stands for: A. Employee Retirement Income Security Act B. Employer Reporting Insurance Standards Act C. Employer Required Insurance Security Act D. Employment Reconciliation Income Standards Act - CORRECT ANSWER A. Employee Retirement Income Security Act Nontaxable Third Party Sick Pay is reported in Box 12, preceded by which of the following codes? A. M B. J C. C D. P - CORRECT ANSWER B. J When ERs are determining their quarterly FUTA tax liability for the first three calendar quarter, what should they assume? A. 6.0% of their FUTA taxable wages will be due each quarter B. 5.4% of their FUTA taxable wages will be due each quarter C. No deposits should be made until 4th quarter when they file their annual 940 D. 0.6% of their FUTA taxable wages will be due each quarter - CORRECT ANSWER D. 0.6% of their FUTA taxable wages will be due each quarter The major objective of basic classification code for workers' compensations is to: A. Group EE's activities by risk B. Establish common exception classes C. Identify national council states D. Group similar business entities by common operating risk - CORRECT ANSWER D. Group similar business entities by common operating risk When an ER receives Form 668-W from the IRS, when must the ER begin to withhold and remit? A. With the first payment of wages after receipt of Form 668-W B. Within 14 days after receipt of Form 668-W C. Within 30 days after receipt of Form 668-W D. Within 30 days after receipt of Form 668-W or the first date of payment of wages, whichever is later - CORRECT ANSWER A. With the first payment of wages after receipt of Form 668-W The taxable and tax amounts for ER paid GTL premiums for coverage over $50,000 are reported on the W-2 as: A. Excluded from Box 1, included in Boxes 3 and 5, Box 12 coded "C" B. Included in Boxes 1, 3 and 5, Box 12 Code "C" C. Included in Boxes 1, 2, 3, and 5, Box 12 coded "G" D. Excluded from Box 1, included in Boxes 3 and 5, Box 12 coded "G" - CORRECT ANSWER B. Included in Boxes 1, 3 and 5, Box 12 Code "C" The final FUTA payment for the year is due on: A. 01/15 B. 12/31 C. 01/31 D. 02/15 - CORRECT ANSWER C. 01/31 Tip allocations are needed if the total tips reported are less than what % of ER's gross receipts? A. 10% B. 8% C. 12% D. 28% - CORRECT ANSWER B. 8% An ER that pays contributions to more than one state UI fund must file: A. Form 940 B. Form 944 C. Form 941 D. Form 941c - CORRECT ANSWER A. Form 940 Exempt, hourly paid computer professionals must be paid not less than how much per hour? A. $27.63 B. $33.48 C. $4.75 D. $5.15 - CORRECT ANSWER A. $27.63 Which of the following plans BEST describes a cafeteria plan under Section 125 of the IRC? A. A quantified and accountable expense reimbursement plan B. A tax-qualified retirement plan which meets special needs C. A plan which permits EEs to select from two or more qualified taxable and nontaxable benefits D. A plan whereby EEs may request that pretax dollars be set aside in a qualified retirement account until age 59 - CORRECT ANSWER C. A plan which permits employees to select from two or more qualified taxable and nontaxable benefits ABCco filed Forms 1099-MISC for workers that should have been classified as EEs. What penalties will be assessed to for improper worker classification? A. 40% of FICA and 3.0% of FIT B. 20% of FICA and 1.5% of FIT C. 100% of FICA and 100% of FIT D. 97% abatement - CORRECT ANSWER B. 20% of FICA and 1.5% of FIT Which statement below defines "Tax Deferred" wages and "Tax Exempt" wages? A. "Tax Deferred" means that taxes will be due at some later period in time. "Tax Exempt" means that taxes will never be due. B. "Tax Deferred" means that taxes will never be due. "Tax Exempt" means that taxes will be due at some later period in time. C. "Tax Deferred" and "Tax Exempt" both mean that taxes will never be due. D. "Tax Deferred" and "Tax Exempt" both mean that taxes will be due at some later period in time. - CORRECT ANSWER A. "Tax Deferred" means that taxes will be due at some later period in time. "Tax Exempt" means that taxes will never be due. An ER must file a Form 940 if: A. EEs were employed on any day in the current or preceding calendar year B. EEs were employed on any day in any 20 weeks in the current or preceding calendar year C. EEs were employed on any 20 different days in the current or preceding calendar year D. 20 EEs or more were employed on any day in the current or preceding calendar year - CORRECT ANSWER B. Employees were employed on any day in any 20 weeks in the current or preceding calendar year An EE who works for more than one ER and has exceeded the SS wage base may: A. Get a refund on their personal income tax return B. Demand that the ER refund the coverage C. Apply the Social Security tax to next year's withholdings D. Apply the overage to benefits paid at age 65 - CORRECT ANSWER A. Get a refund on their personal income tax return Payments to independent contractors must be reported