1. Which payroll tax is typically shared equally between the
employee and the employer?
A. Federal income tax
B. Social Security tax
C. Medicare tax
D. State income tax
Answer: B) Social Security tax
Rationale: Social Security tax is split equally between the
employee and employer at a rate set by the federal government.
2. Which of the following is true regarding overtime pay?
A. Overtime pay is required for all employees, regardless of job
duties
B. Overtime pay is calculated as time and a half for hours worked
beyond 40 in a workweek
C. Overtime pay is calculated as double the hourly rate for hours
worked beyond 40 in a workweek
D. Overtime pay is not required for salaried employees
Answer: B) Overtime pay is calculated as time and a half for hours
worked beyond 40 in a workweek
,Rationale: Overtime pay is required at a rate of 1.5 times the
regular hourly rate for hours worked beyond 40 in a workweek for
eligible (non-exempt) employees.
3. What does the term "FICA" stand for?
A. Federal Income Contribution Act
B. Federal Insurance Contributions Act
C. Fair Income Contribution Act
D. Federal International Compensation Act
Answer: B) Federal Insurance Contributions Act
Rationale: FICA refers to the Federal Insurance Contributions
Act, which mandates payroll taxes for Social Security and
Medicare.
4. How often are most employees paid in a semi-monthly payroll
system?
A. Once a week
B. Every two weeks
C. Twice a month
D. Monthly
Answer: C) Twice a month
, Rationale: In a semi-monthly payroll system, employees are
typically paid twice a month, often on the 15th and the last day of
the month.
5. What is the function of a payroll clearing account?
A. To record the employer’s payroll taxes
B. To temporarily hold payroll funds before they are distributed
C. To track the employee’s deductions
D. To calculate gross pay
Answer: B) To temporarily hold payroll funds before they are
distributed
Rationale: A payroll clearing account is used to hold funds
temporarily before they are distributed to employees or used for
taxes and deductions.
6. Which of the following is NOT required on a pay stub?
A. Employee’s gross wages
B. Deductions for federal taxes
C. Employee’s date of birth
D. The employer's name and address
Answer: C) Employee’s date of birth
employee and the employer?
A. Federal income tax
B. Social Security tax
C. Medicare tax
D. State income tax
Answer: B) Social Security tax
Rationale: Social Security tax is split equally between the
employee and employer at a rate set by the federal government.
2. Which of the following is true regarding overtime pay?
A. Overtime pay is required for all employees, regardless of job
duties
B. Overtime pay is calculated as time and a half for hours worked
beyond 40 in a workweek
C. Overtime pay is calculated as double the hourly rate for hours
worked beyond 40 in a workweek
D. Overtime pay is not required for salaried employees
Answer: B) Overtime pay is calculated as time and a half for hours
worked beyond 40 in a workweek
,Rationale: Overtime pay is required at a rate of 1.5 times the
regular hourly rate for hours worked beyond 40 in a workweek for
eligible (non-exempt) employees.
3. What does the term "FICA" stand for?
A. Federal Income Contribution Act
B. Federal Insurance Contributions Act
C. Fair Income Contribution Act
D. Federal International Compensation Act
Answer: B) Federal Insurance Contributions Act
Rationale: FICA refers to the Federal Insurance Contributions
Act, which mandates payroll taxes for Social Security and
Medicare.
4. How often are most employees paid in a semi-monthly payroll
system?
A. Once a week
B. Every two weeks
C. Twice a month
D. Monthly
Answer: C) Twice a month
, Rationale: In a semi-monthly payroll system, employees are
typically paid twice a month, often on the 15th and the last day of
the month.
5. What is the function of a payroll clearing account?
A. To record the employer’s payroll taxes
B. To temporarily hold payroll funds before they are distributed
C. To track the employee’s deductions
D. To calculate gross pay
Answer: B) To temporarily hold payroll funds before they are
distributed
Rationale: A payroll clearing account is used to hold funds
temporarily before they are distributed to employees or used for
taxes and deductions.
6. Which of the following is NOT required on a pay stub?
A. Employee’s gross wages
B. Deductions for federal taxes
C. Employee’s date of birth
D. The employer's name and address
Answer: C) Employee’s date of birth
