FPC Exam Fundamental Payroll
UPDATED ACTUAL Questions and
CORRECT ANSWERS
668-W - CORRECT ANSWER- ✔✔Notice of Levy on Wages, Salary, and Other Income
1096 - CORRECT ANSWER- ✔✔Annual Summary and Transmittal of U.S. Information
Returns
Under the FLSA how old must a minor be to be employed? - CORRECT ANSWER- ✔✔14
What is the FUTA tax rate? - CORRECT ANSWER- ✔✔6.0%
On form 941, the employer reports - CORRECT ANSWER- ✔✔Social Security Wages
What is the formula for calculating an employees net pay? - CORRECT ANSWER-
✔✔Gross pay-deductions for taxes- other deductions
Which plan discriminates in favor of highly compensated employees? - CORRECT
ANSWER- ✔✔Nonqualified deferred compensation plans
What is the federal minimum wage per hour on January 1, 2018? - CORRECT ANSWER-
✔✔$7.25
What law determines time limits with which employees must be paid after wages are earned?
- CORRECT ANSWER- ✔✔State Laws
Cafeteria plans are authorized by what internal revenue code section? - CORRECT
ANSWER- ✔✔125
, The direct deposit data sent to the bank after payroll processing is an example of -
CORRECT ANSWER- ✔✔Interface
What taxes, if any, must be withheld from payments to an independent contractor who
provided a tin? - CORRECT ANSWER- ✔✔No taxes are withheld
An external audit: - CORRECT ANSWER- ✔✔Allows an objective assessment of the
financial statements.
Employees' privacy rights are governed by all of the following except: - CORRECT
ANSWER- ✔✔Local Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to be
paid overtime? - CORRECT ANSWER- ✔✔Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any? - CORRECT
ANSWER- ✔✔They are included in all tax calculations
What is the 2018 wage base for social security tax? - CORRECT ANSWER- ✔✔$128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what must the
employer do? - CORRECT ANSWER- ✔✔Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following tasks
except: - CORRECT ANSWER- ✔✔Recognize changes in laws and regulations
An employee's profit sharing bonus is payable in the year following his death. How should
the bonus be taxed and reported? - CORRECT ANSWER- ✔✔Withhold no taxes and report
the bonus on for 1099-misc.
In what ways can a computerized system increase the accuracy of employees paychecks? -
CORRECT ANSWER- ✔✔By reducing human error
UPDATED ACTUAL Questions and
CORRECT ANSWERS
668-W - CORRECT ANSWER- ✔✔Notice of Levy on Wages, Salary, and Other Income
1096 - CORRECT ANSWER- ✔✔Annual Summary and Transmittal of U.S. Information
Returns
Under the FLSA how old must a minor be to be employed? - CORRECT ANSWER- ✔✔14
What is the FUTA tax rate? - CORRECT ANSWER- ✔✔6.0%
On form 941, the employer reports - CORRECT ANSWER- ✔✔Social Security Wages
What is the formula for calculating an employees net pay? - CORRECT ANSWER-
✔✔Gross pay-deductions for taxes- other deductions
Which plan discriminates in favor of highly compensated employees? - CORRECT
ANSWER- ✔✔Nonqualified deferred compensation plans
What is the federal minimum wage per hour on January 1, 2018? - CORRECT ANSWER-
✔✔$7.25
What law determines time limits with which employees must be paid after wages are earned?
- CORRECT ANSWER- ✔✔State Laws
Cafeteria plans are authorized by what internal revenue code section? - CORRECT
ANSWER- ✔✔125
, The direct deposit data sent to the bank after payroll processing is an example of -
CORRECT ANSWER- ✔✔Interface
What taxes, if any, must be withheld from payments to an independent contractor who
provided a tin? - CORRECT ANSWER- ✔✔No taxes are withheld
An external audit: - CORRECT ANSWER- ✔✔Allows an objective assessment of the
financial statements.
Employees' privacy rights are governed by all of the following except: - CORRECT
ANSWER- ✔✔Local Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to be
paid overtime? - CORRECT ANSWER- ✔✔Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any? - CORRECT
ANSWER- ✔✔They are included in all tax calculations
What is the 2018 wage base for social security tax? - CORRECT ANSWER- ✔✔$128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what must the
employer do? - CORRECT ANSWER- ✔✔Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following tasks
except: - CORRECT ANSWER- ✔✔Recognize changes in laws and regulations
An employee's profit sharing bonus is payable in the year following his death. How should
the bonus be taxed and reported? - CORRECT ANSWER- ✔✔Withhold no taxes and report
the bonus on for 1099-misc.
In what ways can a computerized system increase the accuracy of employees paychecks? -
CORRECT ANSWER- ✔✔By reducing human error
