1. Which of the following does NOT affect an employee’s net pay?
A. Taxable wages
B. Pre-tax deductions
C. Post-tax deductions
D. Employee’s job title
Answer: D) Employee’s job title
Rationale: An employee's net pay is impacted by taxable wages
and deductions, but the job title does not directly affect net pay.
2. Which of the following would be included in a payroll journal
entry?
A. The employer's contributions to the employee's retirement
plan
B. The employee's W-4 form
C. The state unemployment tax paid by the employee
D. The gross wages before deductions
Answer: A) The employer's contributions to the employee's
retirement plan
Rationale: A payroll journal entry would include both the
employee's and employer’s contributions to benefits, such as
retirement plans.
,3. In the case of a payroll error, what is the primary action an
employer must take?
A. Issue a paycheck for the full amount owed
B. Correct the error and adjust future paychecks or issue a
supplemental payment
C. Wait until the next payroll period to correct the error
D. Contact the employee's bank to reverse the transaction
Answer: B) Correct the error and adjust future paychecks or issue
a supplemental payment
Rationale: If there’s a payroll error, employers should correct it
promptly by adjusting the next payroll or issuing a supplemental
check.
4. Which of the following is NOT required on a pay stub?
A. Employee’s gross wages
B. Deductions for federal taxes
C. Employee’s date of birth
D. The employer's name and address
Answer: C) Employee’s date of birth
Rationale: Pay stubs must include gross wages, deductions, and
employer information, but the employee's date of birth is not
typically required.
, 5. Which of the following is required for compliance with the
Affordable Care Act (ACA) for employers with 50 or more full-
time employees?
A. Providing a retirement plan
B. Offering health insurance to full-time employees
C. Offering paid sick leave
D. Reporting income on a W-2 form
Answer: B) Offering health insurance to full-time employees
Rationale: Employers with 50 or more full-time employees are
required by the ACA to provide affordable health insurance to
their full-time employees or face penalties.
6. Which of the following describes "taxable income"?
A. Income after deductions
B. Gross pay minus voluntary deductions
C. The total amount an employee is paid before any deductions
D. The amount of income subject to federal income tax
Answer: D) The amount of income subject to federal income tax
Rationale: Taxable income refers to the portion of an employee's
earnings that is subject to federal income tax.
A. Taxable wages
B. Pre-tax deductions
C. Post-tax deductions
D. Employee’s job title
Answer: D) Employee’s job title
Rationale: An employee's net pay is impacted by taxable wages
and deductions, but the job title does not directly affect net pay.
2. Which of the following would be included in a payroll journal
entry?
A. The employer's contributions to the employee's retirement
plan
B. The employee's W-4 form
C. The state unemployment tax paid by the employee
D. The gross wages before deductions
Answer: A) The employer's contributions to the employee's
retirement plan
Rationale: A payroll journal entry would include both the
employee's and employer’s contributions to benefits, such as
retirement plans.
,3. In the case of a payroll error, what is the primary action an
employer must take?
A. Issue a paycheck for the full amount owed
B. Correct the error and adjust future paychecks or issue a
supplemental payment
C. Wait until the next payroll period to correct the error
D. Contact the employee's bank to reverse the transaction
Answer: B) Correct the error and adjust future paychecks or issue
a supplemental payment
Rationale: If there’s a payroll error, employers should correct it
promptly by adjusting the next payroll or issuing a supplemental
check.
4. Which of the following is NOT required on a pay stub?
A. Employee’s gross wages
B. Deductions for federal taxes
C. Employee’s date of birth
D. The employer's name and address
Answer: C) Employee’s date of birth
Rationale: Pay stubs must include gross wages, deductions, and
employer information, but the employee's date of birth is not
typically required.
, 5. Which of the following is required for compliance with the
Affordable Care Act (ACA) for employers with 50 or more full-
time employees?
A. Providing a retirement plan
B. Offering health insurance to full-time employees
C. Offering paid sick leave
D. Reporting income on a W-2 form
Answer: B) Offering health insurance to full-time employees
Rationale: Employers with 50 or more full-time employees are
required by the ACA to provide affordable health insurance to
their full-time employees or face penalties.
6. Which of the following describes "taxable income"?
A. Income after deductions
B. Gross pay minus voluntary deductions
C. The total amount an employee is paid before any deductions
D. The amount of income subject to federal income tax
Answer: D) The amount of income subject to federal income tax
Rationale: Taxable income refers to the portion of an employee's
earnings that is subject to federal income tax.
