2024 CPP-CERTIFIED PAYROLL PROFESSIONAL (CPP) FINAL EXAM AND PRACTICE QUESTIONS EXAM
COMPLETE QUESTIONS WITH DETAILED VERIFIED ANSWERS (100% CORRECT ANSWERS) /ALREADY
GRADED A+
T/F: The responsibility for determining the employment status of an individual who performs services
rests with the employer. - correct one-True
Which taxes are elective deferrals to a 457b plan for public sector employees subject to if the
employer is subject to
SS and Medicare taxes?
A. SS and Medicare
B. SS, Medicare, and Federal
C. SS, Medicare, FUTA
D. SS, Medicare, FUTA and federal - correct one-A. SS and Medicare
In 2016, what is the maximum amount of contributions that can be made by an employee and an
employer to the employee's account in a defined contribution plan?
A. $18,000
B. $24,000
C. $53,000
D. $265,000 - correct one-C. $53,000
T/F: At the beginning of the year, Frances elects to buy medical and dental insurance as part of a
package in her company's cafeteria plan. During the year Frances has the option to change to a
different plan at anytime. - correct one-False
T/F: If employees choose to take cash instead of purchasing benefits with their flex dollars under a
cafeteria plan, the payments are wages subject to federal income tax withholding and SS, Medicare
and FUTA. - correct one-True
T/F: Cafeteria plans can allow employees to carry over up to $1,000 of their health FSA salary
reductions from one year to the next. - correct one-False
,T/F: Payments received as workers' comp benefits are not included in an employee's gross income and
are not subject to SS, Medicare, of FUTA taxes. - correct one-True
T/F: The third-party administrator acting as the employer's agent may use the optional flat rate for
federal income tax withholding from sick pay provided to employees. - correct one-True
What major piece of social legislation guarantees employees the right to unpaid leave to care for a
newborn child or seriously ill family member? - correct one-Family and medical leave act (FLMA)
Name the popular benefit offered by mid-size to large employers that gives employees a choice from a
"menu" of cash compensation and nontaxable qualified benefits. - correct one-Cafe plan
Can and employee of a public school who participates in a 403b tax sheltered annuity also participate
in a 401k plan? - correct one-Only if in effect prior to 1986 tax reform
Under the FLMA, eligible employees are entitled to how many weeks of unpaid leave in a year to be
with a newborn or newly adopted child, to take care of a seriously ill child, spouse, or parent, or to
care for themselves if they are seriously ill? - correct one-12 weeks
What are three examples of changes in status that allow a cafeteria plan to permit an employee to
change a cafeteria plan benefit election during the plan year? - correct one-
- marriage
- death
- adoption
- resident change
Name the three main nondiscrimination tests that cafeteria plans must satisfy to qualify for
perferential tax treatment - correct one-
- eliglibity
- contribution
- concentration
,Name the three major types of health care plans offered by employers to their employees. - correct
one-HMo, PPO, and traditional
How does the Internal Revenue code define "medical care" in terms of an employee's reimbursement
for such medical care? - correct one-Dianogis, cure, mitagtion treatment of diasease
What conditions must be satisfied for an employer provided group health insurance plan to be
nondiscriminatory in terms of eligibility and benefits. - correct one
-- 70% of all employees
- at least 80% eligibible
- or classification from Secretary of Tresurary
What is the difference between sick pay and worker's comp benefits. - correct one-sick pay is for hours
missed due to illness
W/C due to injury or illness on the job
In terms of third-party sick pay, what information should the employer provide the third party to aid
the third party in properly meeting its withholding, depositing, and reporting responsibilities? - correct
one-- wages
- last month worked
- EE contribution to cost of insurance
Employers are assigned "classification codes" based on their type of business for determining the
employer's workers' comp premium. Outline the classification code exemptions. - correct one
-The more dangerous the job the higher the cost
- office workers would be lower
What are the advantages of pre-tax benefit contributions - correct one-lower taxable income
What information must the payroll department maintain for the proper administration of defined
benefit plans? - correct one-- hours worked
, - comp earned
- date of birth
- date of hire
T/F: An accountant who provides bookkeeping and payroll services to several local businesses and
works at her own office is an independent contractor. - correct one-True
T/F: Telemarketers working under the direction of a company are usually independent contractors. -
correct one-False
T/F: Workers hired through a temporary help agency are not employees of the client company. -
correct one-True
T/F: Full-time life insurance salespersons are always considered statutory employees and are never
subject to FUTA tax. - correct one-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. - correct one-True
What does a social security card prove in terms of an employee's work authorization IRCA? - correct
one-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? - correct one-E-Verify
When must employers report newly hired employees under the federal new hire reporting
requirements? - correct one-20 calendar days
What information must be reported by an employer for each new hire under federal new hire
reporting requirement? - correct one-Name, address, Social Security number, First day worked
COMPLETE QUESTIONS WITH DETAILED VERIFIED ANSWERS (100% CORRECT ANSWERS) /ALREADY
GRADED A+
T/F: The responsibility for determining the employment status of an individual who performs services
rests with the employer. - correct one-True
Which taxes are elective deferrals to a 457b plan for public sector employees subject to if the
employer is subject to
SS and Medicare taxes?
A. SS and Medicare
B. SS, Medicare, and Federal
C. SS, Medicare, FUTA
D. SS, Medicare, FUTA and federal - correct one-A. SS and Medicare
In 2016, what is the maximum amount of contributions that can be made by an employee and an
employer to the employee's account in a defined contribution plan?
A. $18,000
B. $24,000
C. $53,000
D. $265,000 - correct one-C. $53,000
T/F: At the beginning of the year, Frances elects to buy medical and dental insurance as part of a
package in her company's cafeteria plan. During the year Frances has the option to change to a
different plan at anytime. - correct one-False
T/F: If employees choose to take cash instead of purchasing benefits with their flex dollars under a
cafeteria plan, the payments are wages subject to federal income tax withholding and SS, Medicare
and FUTA. - correct one-True
T/F: Cafeteria plans can allow employees to carry over up to $1,000 of their health FSA salary
reductions from one year to the next. - correct one-False
,T/F: Payments received as workers' comp benefits are not included in an employee's gross income and
are not subject to SS, Medicare, of FUTA taxes. - correct one-True
T/F: The third-party administrator acting as the employer's agent may use the optional flat rate for
federal income tax withholding from sick pay provided to employees. - correct one-True
What major piece of social legislation guarantees employees the right to unpaid leave to care for a
newborn child or seriously ill family member? - correct one-Family and medical leave act (FLMA)
Name the popular benefit offered by mid-size to large employers that gives employees a choice from a
"menu" of cash compensation and nontaxable qualified benefits. - correct one-Cafe plan
Can and employee of a public school who participates in a 403b tax sheltered annuity also participate
in a 401k plan? - correct one-Only if in effect prior to 1986 tax reform
Under the FLMA, eligible employees are entitled to how many weeks of unpaid leave in a year to be
with a newborn or newly adopted child, to take care of a seriously ill child, spouse, or parent, or to
care for themselves if they are seriously ill? - correct one-12 weeks
What are three examples of changes in status that allow a cafeteria plan to permit an employee to
change a cafeteria plan benefit election during the plan year? - correct one-
- marriage
- death
- adoption
- resident change
Name the three main nondiscrimination tests that cafeteria plans must satisfy to qualify for
perferential tax treatment - correct one-
- eliglibity
- contribution
- concentration
,Name the three major types of health care plans offered by employers to their employees. - correct
one-HMo, PPO, and traditional
How does the Internal Revenue code define "medical care" in terms of an employee's reimbursement
for such medical care? - correct one-Dianogis, cure, mitagtion treatment of diasease
What conditions must be satisfied for an employer provided group health insurance plan to be
nondiscriminatory in terms of eligibility and benefits. - correct one
-- 70% of all employees
- at least 80% eligibible
- or classification from Secretary of Tresurary
What is the difference between sick pay and worker's comp benefits. - correct one-sick pay is for hours
missed due to illness
W/C due to injury or illness on the job
In terms of third-party sick pay, what information should the employer provide the third party to aid
the third party in properly meeting its withholding, depositing, and reporting responsibilities? - correct
one-- wages
- last month worked
- EE contribution to cost of insurance
Employers are assigned "classification codes" based on their type of business for determining the
employer's workers' comp premium. Outline the classification code exemptions. - correct one
-The more dangerous the job the higher the cost
- office workers would be lower
What are the advantages of pre-tax benefit contributions - correct one-lower taxable income
What information must the payroll department maintain for the proper administration of defined
benefit plans? - correct one-- hours worked
, - comp earned
- date of birth
- date of hire
T/F: An accountant who provides bookkeeping and payroll services to several local businesses and
works at her own office is an independent contractor. - correct one-True
T/F: Telemarketers working under the direction of a company are usually independent contractors. -
correct one-False
T/F: Workers hired through a temporary help agency are not employees of the client company. -
correct one-True
T/F: Full-time life insurance salespersons are always considered statutory employees and are never
subject to FUTA tax. - correct one-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. - correct one-True
What does a social security card prove in terms of an employee's work authorization IRCA? - correct
one-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? - correct one-E-Verify
When must employers report newly hired employees under the federal new hire reporting
requirements? - correct one-20 calendar days
What information must be reported by an employer for each new hire under federal new hire
reporting requirement? - correct one-Name, address, Social Security number, First day worked
