FPC Practice Test #2 UPDATED ACTUAL
Exam Questions and CORRECT Answers
What does the realization principle demonstrate?
a. Overstatements of income must always be avoided.
b. The organization is a separate entity from its owner.
c. Transactions are logged as a single unit of currency.
d. Revenue equals the cash received or the fair market value of the goods and/or services
received. - CORRECT ANSWER -D
Calculate the gross wages for the following employee's weekly pay:
The employee is paid at a rate of $22 per hour with a shift differential rate of an additional $1 per
hour.
The employee worked 45 hours, 5 of which were at shift differential pay. He also received a
$1,000 discretionary bonus.
a. $1,995.00
b. $2,050.28
c. $2,105.83
d. $2,150.83 - CORRECT ANSWER - 40 hours x $22 = $880 (regular rate for 40h)
5 x $23 = $115 (shift differential rate pay for 5h)
$880 + $115 =$995.00 (gross pay for hours worked)
$995/45 =$22.11 (FLSA regular rate)
,$22.11 x 0.5 =$11.055 (FLSA premium half-time rate)
$11.055 x 5 =$55.28 in FLSA wages
$55.28 + $995 + $1,000 (discretionary bonus) = $2,050.28 (total gross pay)
The payroll department receives a creditor garnishment for one of its employees. Which laws
pertaining to garnishments should be followed?
a. Laws of the state in which the employee works
b. IRS laws
c. Local/county laws
d. Laws of the state in which the garnishment was filed - CORRECT ANSWER -D
Which of the following would be considered a year-end procedure for the payroll department?
a. Checking pay code configurations to ensure correct W-2 box setup
b. Hiring an external auditor
c. Prenotification
d. Purging all W-2s from the prior year - CORRECT ANSWER -A
All of the following statements about Regulation E are true except one. Which statement is
FALSE?
a. State law takes precedence over Regulation E.
b. Employers can make direct deposit mandatory if using one designated bank for all employees.
c. The Federal Reserve Board oversees Regulation E.
d. Regulation E was created to protect consumers. - CORRECT ANSWER -B
,An employer must pay an equal amount of tax as the employee for which of the following
taxations?
a. Local
b. Federal
c. Medicare
d. State - CORRECT ANSWER -C
Explanation:
Medicare tax is equally matched by the employer (1.45% each).
In order to pass the physical presence test, an individual must be physically present in a foreign
country for how long?
a. At least 350 days within a rolling 12-month period
b. At least 330 days within a 12-month calendar period
c. At least 350 days within a 12-month calendar period
d. At least 330 days within a rolling 12-month period - CORRECT ANSWER -D
Which type of voluntary retirement plan is only available to state and local government
employees or highly compensated employees of non-profit organizations?
a. 501(c)
b. 408(k)
c. 408(p)
d. 457(b) - CORRECT ANSWER -D
Which of the following is an example of a working condition fringe benefit?
, a. An officer's use of a marked police car when not on call
b. Business use of a company car
c. Non-job-related courses or education
d. Personal use of a company car - CORRECT ANSWER -B
A payroll manager's responsibility to assist an employee in dealing with a poor attitude is known
as what?
a. Reprimanding
b. Counseling
c. Coaching
d. Motivating - CORRECT ANSWER -B
All of the following are considered exempt/salaried professionals EXCEPT:
a. Teachers
b. Pharmacists
c. Lawyers
d. Physicians - CORRECT ANSWER -B
Which of the following policies can a payroll department implement to prevent fraudulent
behavior within the department?
a. Payroll staff will not be allowed to see employee personnel records.
b. Departments will only use paper timesheets.
c. Payroll staff will rotate duties each pay period.
d. Prenotification will be run every pay period. - CORRECT ANSWER -C
Exam Questions and CORRECT Answers
What does the realization principle demonstrate?
a. Overstatements of income must always be avoided.
b. The organization is a separate entity from its owner.
c. Transactions are logged as a single unit of currency.
d. Revenue equals the cash received or the fair market value of the goods and/or services
received. - CORRECT ANSWER -D
Calculate the gross wages for the following employee's weekly pay:
The employee is paid at a rate of $22 per hour with a shift differential rate of an additional $1 per
hour.
The employee worked 45 hours, 5 of which were at shift differential pay. He also received a
$1,000 discretionary bonus.
a. $1,995.00
b. $2,050.28
c. $2,105.83
d. $2,150.83 - CORRECT ANSWER - 40 hours x $22 = $880 (regular rate for 40h)
5 x $23 = $115 (shift differential rate pay for 5h)
$880 + $115 =$995.00 (gross pay for hours worked)
$995/45 =$22.11 (FLSA regular rate)
,$22.11 x 0.5 =$11.055 (FLSA premium half-time rate)
$11.055 x 5 =$55.28 in FLSA wages
$55.28 + $995 + $1,000 (discretionary bonus) = $2,050.28 (total gross pay)
The payroll department receives a creditor garnishment for one of its employees. Which laws
pertaining to garnishments should be followed?
a. Laws of the state in which the employee works
b. IRS laws
c. Local/county laws
d. Laws of the state in which the garnishment was filed - CORRECT ANSWER -D
Which of the following would be considered a year-end procedure for the payroll department?
a. Checking pay code configurations to ensure correct W-2 box setup
b. Hiring an external auditor
c. Prenotification
d. Purging all W-2s from the prior year - CORRECT ANSWER -A
All of the following statements about Regulation E are true except one. Which statement is
FALSE?
a. State law takes precedence over Regulation E.
b. Employers can make direct deposit mandatory if using one designated bank for all employees.
c. The Federal Reserve Board oversees Regulation E.
d. Regulation E was created to protect consumers. - CORRECT ANSWER -B
,An employer must pay an equal amount of tax as the employee for which of the following
taxations?
a. Local
b. Federal
c. Medicare
d. State - CORRECT ANSWER -C
Explanation:
Medicare tax is equally matched by the employer (1.45% each).
In order to pass the physical presence test, an individual must be physically present in a foreign
country for how long?
a. At least 350 days within a rolling 12-month period
b. At least 330 days within a 12-month calendar period
c. At least 350 days within a 12-month calendar period
d. At least 330 days within a rolling 12-month period - CORRECT ANSWER -D
Which type of voluntary retirement plan is only available to state and local government
employees or highly compensated employees of non-profit organizations?
a. 501(c)
b. 408(k)
c. 408(p)
d. 457(b) - CORRECT ANSWER -D
Which of the following is an example of a working condition fringe benefit?
, a. An officer's use of a marked police car when not on call
b. Business use of a company car
c. Non-job-related courses or education
d. Personal use of a company car - CORRECT ANSWER -B
A payroll manager's responsibility to assist an employee in dealing with a poor attitude is known
as what?
a. Reprimanding
b. Counseling
c. Coaching
d. Motivating - CORRECT ANSWER -B
All of the following are considered exempt/salaried professionals EXCEPT:
a. Teachers
b. Pharmacists
c. Lawyers
d. Physicians - CORRECT ANSWER -B
Which of the following policies can a payroll department implement to prevent fraudulent
behavior within the department?
a. Payroll staff will not be allowed to see employee personnel records.
b. Departments will only use paper timesheets.
c. Payroll staff will rotate duties each pay period.
d. Prenotification will be run every pay period. - CORRECT ANSWER -C
