FPC ACTUAL PRACTICE QUESTIONS 2026 SPRING-SEMESTER WITH ACCURATE
SOLUTIONS- GRADED A+
cafeteria plan are authorized by what Internal Revenue Code Section?
A. 125
B. 401k
C. 403b
D. 457b
a. 125
all of the following are tax implications of a cafeteria plan except:
a. no income tax withholding
b. no social security and medicare tax withholding
c. must withhold income, social security, and medicare taxes
d. no form W2 reporting
C. must withhold income, social security, and medicare taxes
One of the options in an employee's cafeteria benefit plan is a dependent care flexible
spending account. He earmarked $100 per month to the account to pay for child care but
spend only $1000 by the end of the plans grace period. at the end of the grace period, what
happens to the $200 left in the account?
a. the amount is forfeited
b. it will be added to his taxable income
c. he can use it to "buy" ab additional benefit
d. it ill carry over to the next year
,A. the amount is forfeited
Prior to beginning work for a company, a chemical engineer signed a contract stating that
she agreed to work as an independent contractor. she performs all her duties in the
companys laboratories, works under the companys direction, and maintains regular office
hours. what is her status?
a. independent contractor under common law
b. independent contractor under reasonable basis test
c. employee
C. employee
do not assume that the employer has fulfilled its responsibilities and is free from penalty
simply by having a worker sign a contract stating he is a 1099. individuals do not have a
right to waive their ee status in a contract.
A retired safety inspector for the company was rehired as a consultant when the company
expanded its plant operations. the retired employee was a natural choice. the tasks he
undertook as a consultant were the same as the ones he performed before retirement. paid
monthly, he has agreed to work under the direction of his old boss until the new plant
facilitates are fully operational? What is his status?
a. independent contractor under common law
b. independent contractor under reasonable basis test
c. employee
C. employee
,consultants are generally treated as independent contractors. however, when an ex ee is
performing the same or similar job as before retirement, it is unlikely that he qualified as a
1099 after termination
a receptionist has agreed to work afternoons at the company until the company can find a
full time replacement. what is the receptionists status?
a. independent contractor under common law
b. independent contractor under reasonable basis
c. employee
C. employee
whether or not an ee is full time or part time or works a few weeks or a lifetime for the
company is not relevant her. she is an employee.
All of the following types of employees are classified as exempt from the FLSAs min wage
and OT requirements except:
a. professional
b. outside salesperson
c. administrative
d. computer repairman
D. computer repairman
a computer repairman does not perform the duties required to qualify as an exempt
computer professional
, a waitress is paid $2.25 per hour and she receives $225 in tips during the week. She works
4o hours per week. Which of the following is true?
a. her employer is allowed to reduce her cash wage to no less than $2.13 per hour
b. her base pay must be increase to $4.5 per hour after a 90 day training period.
c. she must be paid $5.12 per hour by her employer
d. her base salary must be raised to $3 per hour to comply with fed min wage requirements.
A. her employer is allowed to reduce her cash wage to no less than $2.13 per hour
her employer can claim the full federal tip credit because she receives tips and with her
tips, is paid more than the current federal minimum wage purposes, her employer must
pay her at least $2.13 per hour and her hourly rate plus tips must equal at least the current
federal min wage
if a state sets the minimum wage at a rate greater than the federal minimum wage, the state
minimum wage must be paid to workers in that state
- true
-false
TRUE
tips can be counted toward the employees minimum wage
TRUE
an employee works 40 hours per week as a fry cook. during the week, she substitutes for
one of the waitresses and reports $5 per week in tips. can her employer pay her $2.13 per
hour?
SOLUTIONS- GRADED A+
cafeteria plan are authorized by what Internal Revenue Code Section?
A. 125
B. 401k
C. 403b
D. 457b
a. 125
all of the following are tax implications of a cafeteria plan except:
a. no income tax withholding
b. no social security and medicare tax withholding
c. must withhold income, social security, and medicare taxes
d. no form W2 reporting
C. must withhold income, social security, and medicare taxes
One of the options in an employee's cafeteria benefit plan is a dependent care flexible
spending account. He earmarked $100 per month to the account to pay for child care but
spend only $1000 by the end of the plans grace period. at the end of the grace period, what
happens to the $200 left in the account?
a. the amount is forfeited
b. it will be added to his taxable income
c. he can use it to "buy" ab additional benefit
d. it ill carry over to the next year
,A. the amount is forfeited
Prior to beginning work for a company, a chemical engineer signed a contract stating that
she agreed to work as an independent contractor. she performs all her duties in the
companys laboratories, works under the companys direction, and maintains regular office
hours. what is her status?
a. independent contractor under common law
b. independent contractor under reasonable basis test
c. employee
C. employee
do not assume that the employer has fulfilled its responsibilities and is free from penalty
simply by having a worker sign a contract stating he is a 1099. individuals do not have a
right to waive their ee status in a contract.
A retired safety inspector for the company was rehired as a consultant when the company
expanded its plant operations. the retired employee was a natural choice. the tasks he
undertook as a consultant were the same as the ones he performed before retirement. paid
monthly, he has agreed to work under the direction of his old boss until the new plant
facilitates are fully operational? What is his status?
a. independent contractor under common law
b. independent contractor under reasonable basis test
c. employee
C. employee
,consultants are generally treated as independent contractors. however, when an ex ee is
performing the same or similar job as before retirement, it is unlikely that he qualified as a
1099 after termination
a receptionist has agreed to work afternoons at the company until the company can find a
full time replacement. what is the receptionists status?
a. independent contractor under common law
b. independent contractor under reasonable basis
c. employee
C. employee
whether or not an ee is full time or part time or works a few weeks or a lifetime for the
company is not relevant her. she is an employee.
All of the following types of employees are classified as exempt from the FLSAs min wage
and OT requirements except:
a. professional
b. outside salesperson
c. administrative
d. computer repairman
D. computer repairman
a computer repairman does not perform the duties required to qualify as an exempt
computer professional
, a waitress is paid $2.25 per hour and she receives $225 in tips during the week. She works
4o hours per week. Which of the following is true?
a. her employer is allowed to reduce her cash wage to no less than $2.13 per hour
b. her base pay must be increase to $4.5 per hour after a 90 day training period.
c. she must be paid $5.12 per hour by her employer
d. her base salary must be raised to $3 per hour to comply with fed min wage requirements.
A. her employer is allowed to reduce her cash wage to no less than $2.13 per hour
her employer can claim the full federal tip credit because she receives tips and with her
tips, is paid more than the current federal minimum wage purposes, her employer must
pay her at least $2.13 per hour and her hourly rate plus tips must equal at least the current
federal min wage
if a state sets the minimum wage at a rate greater than the federal minimum wage, the state
minimum wage must be paid to workers in that state
- true
-false
TRUE
tips can be counted toward the employees minimum wage
TRUE
an employee works 40 hours per week as a fry cook. during the week, she substitutes for
one of the waitresses and reports $5 per week in tips. can her employer pay her $2.13 per
hour?
