1
FPC Exam Fundamental Payroll Question
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
1
, 2
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
2
, 3
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
3
FPC Exam Fundamental Payroll Question
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
1
, 2
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
2
, 3
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
3
