FPC Exam Fundamental Payroll UPDATED
ACTUAL Exam 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
What federal taxes must an employer withhold from an employees reported tips? - CORRECT
ANSWER - Federal income, social security and medicare tax
The main purpose of batch controls is to - CORRECT ANSWER - Validate data entry
accuracy
Which of the following types of compensation is taxable? - CORRECT ANSWER -
Backpay awards
What is used when calculating an employee's gross up? - CORRECT ANSWER - Net set
Employees can provide their employer with their marital status and allowances for income tax
withholding purposes by: - CORRECT ANSWER - Completing form W-4
Generally, what is the largest expense for most companies? - CORRECT ANSWER -
Salaries and benefits
What authority controls the frequency with which employees must be paid? - CORRECT
ANSWER - State Laws
What is the general ledger? - CORRECT ANSWER - A record of transactions by account
What, if any, is the 2018 wage base for Medicare tax? - CORRECT ANSWER - There is
no limit
An employer should remind employees to complete an amended W-4 if they have any changes in
status by - CORRECT ANSWER - December 1 of each year
ACTUAL Exam 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
What federal taxes must an employer withhold from an employees reported tips? - CORRECT
ANSWER - Federal income, social security and medicare tax
The main purpose of batch controls is to - CORRECT ANSWER - Validate data entry
accuracy
Which of the following types of compensation is taxable? - CORRECT ANSWER -
Backpay awards
What is used when calculating an employee's gross up? - CORRECT ANSWER - Net set
Employees can provide their employer with their marital status and allowances for income tax
withholding purposes by: - CORRECT ANSWER - Completing form W-4
Generally, what is the largest expense for most companies? - CORRECT ANSWER -
Salaries and benefits
What authority controls the frequency with which employees must be paid? - CORRECT
ANSWER - State Laws
What is the general ledger? - CORRECT ANSWER - A record of transactions by account
What, if any, is the 2018 wage base for Medicare tax? - CORRECT ANSWER - There is
no limit
An employer should remind employees to complete an amended W-4 if they have any changes in
status by - CORRECT ANSWER - December 1 of each year
