CPP PAYROLL FINAL PRACTICE
EXAM QUESTIONS AND
ANSWERS (100% CORRECT)
The Family and Medical Leave Act requires employers to maintain records for at least:
(A) 12 weeks
(B) 1 year
(C) 2 years
(D) 3 years - Answer-(D) 3 years
A nonexempt employee earns $400 per week for a normal schedule of 35 hours. Under
the FLSA,
how much would this employee be due if 48 hours were worked?
(A) $400.00
(B) $594.40
(C) $548.64
(D) $433.32 - Answer-(B) $594.40
$400 ÷ 35 = $11.43
(48 x $11.13) + ($11.23 x .5 x 8) = %594.4
How may federal income tax be withheld from separation pay and accrued vacation
wages totaling
$20,000 that are paid at the time of termination and identified separately on the
employee's pay
stub, if the employee has been paid $25,000 so far this year and had income tax
withheld from her
most recent wage payment?
(A) using the aggregate method only
(B) using the prior 12 months' tax rate
(C) at the optional flat rate for all payouts at termination only
(D) at the optional flat rate or using the aggregate method - Answer-(D) at the optional
flat rate or using the aggregate method
A payroll register for the pay period shows gross earnings of $300,000 and deductions
of $120,000.
The entry to the payroll expense account would be:
,(A) $120,000
(B) $180,000
(C) $300,000
(D) $420,000 - Answer-(C) $300,000
Payroll system user documentation should include:
(A) a copy of the RFP
(B) copies of project development documents
(C) details of disaster recovery procedures
(D) the history of the payroll system conversion - Answer-(C) details of disaster recovery
procedures
When checking for phantom employees, which of the following actions should be taken?
(A) Notify the employees of an impending physical payout.
(B) Have the managers hand checks out to their employees.
(C) Have employees pick up checks and direct deposit/paycard advices and show
identification.
(D) Mail checks directly to employees' homes. - Answer-(C) Have employees pick up
checks and direct deposit/paycard advices and show identification.
Which form is used to request an employer identification number?
(A) I-9
(B) SS-4
(C) SS-5
(D) SS-8 - Answer-(B) SS-4
One element of a payroll calendar is:
(A) payfrequency
(B) hire dates
(C) total remuneration
(D) social security numbers - Answer-(A) payfrequency
With online input, what is the BEST way to control miscellaneous payments?
(A) verification of a sample of entered data
(B) a visual audit of the online activity report
(C) an auditor's comparison of each input source document to the data base record
(D) a comparison of the online report totals to predetermined totals taken from the
source documents - Answer-(D) a comparison of the online report totals to
predetermined totals taken from the source documents
All of the following actions demonstrate a strong customer service orientation EXCEPT:
,(A) exhibiting a customer friendly attitude
(B) viewing customers as the most important part of the job
(C) using voice mail to answer phone calls from customers
(D) establishing relationships with people - Answer-(C) using voice mail to answer
phone calls from customers
Employer-sponsored athletic facilities may be nontaxable fringe benefits if the:
(A) employer requires substantiation of the amount, time, and business purpose of the
facilities ' use
(B) employer incurs no substantial additional cost, except labor, to provide the facilities
(C) facilities are on the employer's premises
(D) facilities qualify as a de minimis fringe - Answer-(C) facilities are on the employer's
premises
When an employer is advised by the IRS that an employee's Form W-4 is invalid, what
action must
the employer take?
(A) All future Forms W-4 must be sent to the IRS as long as the employee is being paid.
(B) Employers have no obligation to change exemptions unless notified by the
employee through a
new Form W-4.
(C) Withhold on the basis of information provided by the IRS.
(D) The employer should send notice at the end of the quarter, requesting that the
employee contact
the IRS to clear up the problem. - Answer-(C) Withhold on the basis of information
provided by the IRS.
A team comprised of members of a department's staff with the intention of improving
their own
process is a:
(A) cross-functional team
(B) conversion team
(C) functional team
(D) management team - Answer-(C) functional team
An employee who works for more than one employer and has exceeded the social
security wage
base may:
(A) take a credit against federal income tax on Form 1040
(B) demand that the employer refund the overage
(C) apply the social security tax to next year's withholdings
, (D) apply the overage to benefits paid at age 65 - Answer-(A) take a credit against
federal income tax on Form 1040
When determining the value of employer-provided parking, which of the following
valuation methods
is allowed?
(A) employer's cost
(B) employee's cost
(C) lower of employee's cost or fair market value
(D) employee's fair market value - Answer-(D) employee's fair market value
What is the purpose of the payroll accrual entry?
(A) to recognize expenses in the period in which they were incurred
(B) to reverse an entry made in error
(C) to recognize expenses in the period in which they were paid
(D) to reverse an entry from a previous period - Answer-(A) to recognize expenses in
the period in which they were incurred
Which of the following steps is LEAST important during the parallel testing phase of a
new payroll
system?
(A) the testing of employee earnings and deductions accuracy
(B) the verification of employees transferred to the new system from the old system
(C) the verification of tax withholding calculations for employees
(D) testing the functionality of a wage attachment process - Answer-(D) testing the
functionality of a wage attachment process
All of the following practices are acceptable to an external auditor EXCEPT:
(A) the accounting department reconciling the payroll checking account
(B) the payroll supervisor verifying that deposits are made timely
(C) storage of blank payroll checks in the payroll department
(D) the treasury department being responsible for the signature of payroll checks -
Answer-(C) storage of blank payroll checks in the payroll department
All of the following types of compensation are subject to social security tax EXCEPT:
(A) tips under $100
(B) deferred bonus
(C) third-party sick pay up to $3,000
(D) workers' compensation benefits - Answer-(D) workers' compensation benefits
EXAM QUESTIONS AND
ANSWERS (100% CORRECT)
The Family and Medical Leave Act requires employers to maintain records for at least:
(A) 12 weeks
(B) 1 year
(C) 2 years
(D) 3 years - Answer-(D) 3 years
A nonexempt employee earns $400 per week for a normal schedule of 35 hours. Under
the FLSA,
how much would this employee be due if 48 hours were worked?
(A) $400.00
(B) $594.40
(C) $548.64
(D) $433.32 - Answer-(B) $594.40
$400 ÷ 35 = $11.43
(48 x $11.13) + ($11.23 x .5 x 8) = %594.4
How may federal income tax be withheld from separation pay and accrued vacation
wages totaling
$20,000 that are paid at the time of termination and identified separately on the
employee's pay
stub, if the employee has been paid $25,000 so far this year and had income tax
withheld from her
most recent wage payment?
(A) using the aggregate method only
(B) using the prior 12 months' tax rate
(C) at the optional flat rate for all payouts at termination only
(D) at the optional flat rate or using the aggregate method - Answer-(D) at the optional
flat rate or using the aggregate method
A payroll register for the pay period shows gross earnings of $300,000 and deductions
of $120,000.
The entry to the payroll expense account would be:
,(A) $120,000
(B) $180,000
(C) $300,000
(D) $420,000 - Answer-(C) $300,000
Payroll system user documentation should include:
(A) a copy of the RFP
(B) copies of project development documents
(C) details of disaster recovery procedures
(D) the history of the payroll system conversion - Answer-(C) details of disaster recovery
procedures
When checking for phantom employees, which of the following actions should be taken?
(A) Notify the employees of an impending physical payout.
(B) Have the managers hand checks out to their employees.
(C) Have employees pick up checks and direct deposit/paycard advices and show
identification.
(D) Mail checks directly to employees' homes. - Answer-(C) Have employees pick up
checks and direct deposit/paycard advices and show identification.
Which form is used to request an employer identification number?
(A) I-9
(B) SS-4
(C) SS-5
(D) SS-8 - Answer-(B) SS-4
One element of a payroll calendar is:
(A) payfrequency
(B) hire dates
(C) total remuneration
(D) social security numbers - Answer-(A) payfrequency
With online input, what is the BEST way to control miscellaneous payments?
(A) verification of a sample of entered data
(B) a visual audit of the online activity report
(C) an auditor's comparison of each input source document to the data base record
(D) a comparison of the online report totals to predetermined totals taken from the
source documents - Answer-(D) a comparison of the online report totals to
predetermined totals taken from the source documents
All of the following actions demonstrate a strong customer service orientation EXCEPT:
,(A) exhibiting a customer friendly attitude
(B) viewing customers as the most important part of the job
(C) using voice mail to answer phone calls from customers
(D) establishing relationships with people - Answer-(C) using voice mail to answer
phone calls from customers
Employer-sponsored athletic facilities may be nontaxable fringe benefits if the:
(A) employer requires substantiation of the amount, time, and business purpose of the
facilities ' use
(B) employer incurs no substantial additional cost, except labor, to provide the facilities
(C) facilities are on the employer's premises
(D) facilities qualify as a de minimis fringe - Answer-(C) facilities are on the employer's
premises
When an employer is advised by the IRS that an employee's Form W-4 is invalid, what
action must
the employer take?
(A) All future Forms W-4 must be sent to the IRS as long as the employee is being paid.
(B) Employers have no obligation to change exemptions unless notified by the
employee through a
new Form W-4.
(C) Withhold on the basis of information provided by the IRS.
(D) The employer should send notice at the end of the quarter, requesting that the
employee contact
the IRS to clear up the problem. - Answer-(C) Withhold on the basis of information
provided by the IRS.
A team comprised of members of a department's staff with the intention of improving
their own
process is a:
(A) cross-functional team
(B) conversion team
(C) functional team
(D) management team - Answer-(C) functional team
An employee who works for more than one employer and has exceeded the social
security wage
base may:
(A) take a credit against federal income tax on Form 1040
(B) demand that the employer refund the overage
(C) apply the social security tax to next year's withholdings
, (D) apply the overage to benefits paid at age 65 - Answer-(A) take a credit against
federal income tax on Form 1040
When determining the value of employer-provided parking, which of the following
valuation methods
is allowed?
(A) employer's cost
(B) employee's cost
(C) lower of employee's cost or fair market value
(D) employee's fair market value - Answer-(D) employee's fair market value
What is the purpose of the payroll accrual entry?
(A) to recognize expenses in the period in which they were incurred
(B) to reverse an entry made in error
(C) to recognize expenses in the period in which they were paid
(D) to reverse an entry from a previous period - Answer-(A) to recognize expenses in
the period in which they were incurred
Which of the following steps is LEAST important during the parallel testing phase of a
new payroll
system?
(A) the testing of employee earnings and deductions accuracy
(B) the verification of employees transferred to the new system from the old system
(C) the verification of tax withholding calculations for employees
(D) testing the functionality of a wage attachment process - Answer-(D) testing the
functionality of a wage attachment process
All of the following practices are acceptable to an external auditor EXCEPT:
(A) the accounting department reconciling the payroll checking account
(B) the payroll supervisor verifying that deposits are made timely
(C) storage of blank payroll checks in the payroll department
(D) the treasury department being responsible for the signature of payroll checks -
Answer-(C) storage of blank payroll checks in the payroll department
All of the following types of compensation are subject to social security tax EXCEPT:
(A) tips under $100
(B) deferred bonus
(C) third-party sick pay up to $3,000
(D) workers' compensation benefits - Answer-(D) workers' compensation benefits
