FPC Practice Questions with 100%
Correct Answers 2024/2025 Latest
Update
When does an exempt W4 expire?
a. at the end of each quarter
b. Feb 15 of next year
c. it continues as long as the ee is subject to ss tax
d. dec 31 each year - Answer-B. Feb 15 of the next year
When making a supplemental wage payment to an employee whose supplemental YTD
wages exceed $1,000,000 what tax rate is used to calculate federal income tax
withholding?
a. 6%
b. 22%
c. 24%
d. 37% - Answer-D. 37%
Which of the following plans can discriminate in favor of highly compensation
employees?
a. section 125 plans
b. defined contribution plans
c. 401k plans
d. nonqualified deferred compensation plans - Answer-d. nonqualified deferred
compensation plans
How frequently must an employer include noncash fringe benefits in an employee's
income?
a. each pay period
b. quarterly
c. semiannually
d. annually - Answer-d. annualy
A semiweekly depositor has a liability of $79,000 from Weds payday and a liability of
$50,000 from Friday's payday. The deposit is due by the:
a. next monday
b. next weds
c. next friday
d. 15th of the month - Answer-A. next monday
,FUTA taxes of more than $500 on wages paid in the first quarter must be deposited no
later than:
a. march 31
b. april 15
c. april 30
d. may 1 - Answer-c. april 30
a semiweekly depositor that has a payroll tax liability of $50,000 from a Monday payroll
must deposit the liability by:
a. tues
b. weds
c. thurs
d. fri - Answer-D. Friday
When an employee has a legal name change, what does the IRS require the employer
to see before reporting the new name on the form W2? - Answer-A corrected social
security card
accounting data beings with a transaction. this information is first posted:
a. on the income statement
b. in the general ledger
c. in the chart of accounts
d. in the journal - Answer-d. in the journal
salaries earned but not yet paid in the current month must be recorded as:
a. debit to salary payable
b. credit to salary expense
c. debit to cash
d. debit to salary expense - Answer-d. debit to salary expense
When supplemental wages are paid at the same time as regular wages, how are
withholding taxes computer?
a. withholding on supplemental wages is taxed separately
b. withholding taxes are based on the total of the wages and supplemental wages
c. supplemental wages are not subject to withholding taxes
d. supplemental wages are taxed at a different withholding rate - Answer-b. withholding
taxes are based on the total of the wages and supplemental wages
what is the effect on an employees income when the employer pays that employees
share of social security and medicare taxes on a fringe benefit?
a. there is no change
b. the taxes paid by the employer are considered income to the employee
c. the amount of the fringe benefit is included in the employees income
d. there are no ss or medicare taxes on fringe benefits - Answer-c. the amount of the
fringe benefit is included in the employees income
,which tax withholidng method uses the average earnings for one pay period to
determine the withholding per pay period?
a. percentage method
b. quarterly averaging method
c. annualizing wage method
d. none of the above - Answer-annualizing wage method
uses the average earning for one pay period multiplied by the total number of pay
periods in the year to calculate the total withholding allowance for the year. the quarterly
averaging methid takes the estimated earning for a quarter and divides that value by a
number of pay periods in the quarter.
what happens to an employees payroll check if that employee dies without a will? -
Answer-the legal heirs must file the proper state claims form
when an employee is terminated, by when must the employer issue the final payroll
check? - Answer-immediately upon termination
for how long must an employer retain unemployment tax records? - Answer-4 years
after income tax filing
Under what condition would an employer be required to allocate tips to employee? -
Answer-when 10 or more staff work on a typical day.
allocated tips are an avergae of all tips received spread across all employees
under social security regulations, how long must an employer retain payroll docs? -
Answer-5 calendar years
under the flsa, how long must an employer preserve time sheets or other docs that
provide a record of employees work hours or work accomplished? - Answer-two years
which type of compensation is reported on form w2? - Answer-prizes, such as
vacations, awarded for outstanding work
when using the percentage method for withholding federal income tax, what must be
subtracted from gross income to determine the amount of tax to be deducted? -
Answer-allowances
first subtracting the allowances from gross income and then multiplying by the
percentage value provided on the federal percentage method withholding table
A section 125 cafeteria plan allows employees to choose from how many benefits -
Answer-B. two or more
, allows ees to use a portion of their paychecks, on a pre tax bases, to pay for insurance
premiums, medical expenses and dependent care expenses.
which deduction is not subtracted from gross earnings when calculating disposable
earnings for a garnishment? - Answer-retirement savings contributions
amount that can be garnished is based on ees disposable income, which is the gross
wages minus amounts for ss, medicare, and the ees share of any state unemployment
insurance. deductions that cannot be deducted from gross income for garnishment
purposes include union dues, health insurance, and retirement savings contributions.
which situation must exist for an individual to claim an additional withholding allowance
to reduce tax withholding? - Answer-the employee is single with one job.
individuals are allowed an exemption for each dependent; someone who relies on the
taxed individual for support and who falls within certain relationship, support, residency,
and age requirements
the purpose of the earned income credit is to... - Answer-reduce taxable income!
a state tax credit which has the effect of decreasing federal income taxes deducted from
an employees wages.
which type of report does not originate from the employees earning record?
a. taxable wages for each ee
b. calc of the appropriate tax rates
c. a report of form 1099 earnings
d. payroll analysis report - Answer-c. a report of 1099 earnings
of the following types of accumulators, which one accumulates values over a period of
time?
a. segment accumulator
b. balance accumulator
c. compunding accumulator
d. composite accumulator - Answer-b. balancing accumulator
an accumulator is an element in a payroll system that keeps a cumulative total of a
specified payroll deduction or earning. a balance accumulator includes totals for several
calculation periods that span a period of time such as a month or a year ago.
which types of documents must be stored separately from all other types of payroll
records? - Answer-a. garnishment reports.
all documentation relating to any garnishments against ees must be kept in a separate
locked cabinet.
Correct Answers 2024/2025 Latest
Update
When does an exempt W4 expire?
a. at the end of each quarter
b. Feb 15 of next year
c. it continues as long as the ee is subject to ss tax
d. dec 31 each year - Answer-B. Feb 15 of the next year
When making a supplemental wage payment to an employee whose supplemental YTD
wages exceed $1,000,000 what tax rate is used to calculate federal income tax
withholding?
a. 6%
b. 22%
c. 24%
d. 37% - Answer-D. 37%
Which of the following plans can discriminate in favor of highly compensation
employees?
a. section 125 plans
b. defined contribution plans
c. 401k plans
d. nonqualified deferred compensation plans - Answer-d. nonqualified deferred
compensation plans
How frequently must an employer include noncash fringe benefits in an employee's
income?
a. each pay period
b. quarterly
c. semiannually
d. annually - Answer-d. annualy
A semiweekly depositor has a liability of $79,000 from Weds payday and a liability of
$50,000 from Friday's payday. The deposit is due by the:
a. next monday
b. next weds
c. next friday
d. 15th of the month - Answer-A. next monday
,FUTA taxes of more than $500 on wages paid in the first quarter must be deposited no
later than:
a. march 31
b. april 15
c. april 30
d. may 1 - Answer-c. april 30
a semiweekly depositor that has a payroll tax liability of $50,000 from a Monday payroll
must deposit the liability by:
a. tues
b. weds
c. thurs
d. fri - Answer-D. Friday
When an employee has a legal name change, what does the IRS require the employer
to see before reporting the new name on the form W2? - Answer-A corrected social
security card
accounting data beings with a transaction. this information is first posted:
a. on the income statement
b. in the general ledger
c. in the chart of accounts
d. in the journal - Answer-d. in the journal
salaries earned but not yet paid in the current month must be recorded as:
a. debit to salary payable
b. credit to salary expense
c. debit to cash
d. debit to salary expense - Answer-d. debit to salary expense
When supplemental wages are paid at the same time as regular wages, how are
withholding taxes computer?
a. withholding on supplemental wages is taxed separately
b. withholding taxes are based on the total of the wages and supplemental wages
c. supplemental wages are not subject to withholding taxes
d. supplemental wages are taxed at a different withholding rate - Answer-b. withholding
taxes are based on the total of the wages and supplemental wages
what is the effect on an employees income when the employer pays that employees
share of social security and medicare taxes on a fringe benefit?
a. there is no change
b. the taxes paid by the employer are considered income to the employee
c. the amount of the fringe benefit is included in the employees income
d. there are no ss or medicare taxes on fringe benefits - Answer-c. the amount of the
fringe benefit is included in the employees income
,which tax withholidng method uses the average earnings for one pay period to
determine the withholding per pay period?
a. percentage method
b. quarterly averaging method
c. annualizing wage method
d. none of the above - Answer-annualizing wage method
uses the average earning for one pay period multiplied by the total number of pay
periods in the year to calculate the total withholding allowance for the year. the quarterly
averaging methid takes the estimated earning for a quarter and divides that value by a
number of pay periods in the quarter.
what happens to an employees payroll check if that employee dies without a will? -
Answer-the legal heirs must file the proper state claims form
when an employee is terminated, by when must the employer issue the final payroll
check? - Answer-immediately upon termination
for how long must an employer retain unemployment tax records? - Answer-4 years
after income tax filing
Under what condition would an employer be required to allocate tips to employee? -
Answer-when 10 or more staff work on a typical day.
allocated tips are an avergae of all tips received spread across all employees
under social security regulations, how long must an employer retain payroll docs? -
Answer-5 calendar years
under the flsa, how long must an employer preserve time sheets or other docs that
provide a record of employees work hours or work accomplished? - Answer-two years
which type of compensation is reported on form w2? - Answer-prizes, such as
vacations, awarded for outstanding work
when using the percentage method for withholding federal income tax, what must be
subtracted from gross income to determine the amount of tax to be deducted? -
Answer-allowances
first subtracting the allowances from gross income and then multiplying by the
percentage value provided on the federal percentage method withholding table
A section 125 cafeteria plan allows employees to choose from how many benefits -
Answer-B. two or more
, allows ees to use a portion of their paychecks, on a pre tax bases, to pay for insurance
premiums, medical expenses and dependent care expenses.
which deduction is not subtracted from gross earnings when calculating disposable
earnings for a garnishment? - Answer-retirement savings contributions
amount that can be garnished is based on ees disposable income, which is the gross
wages minus amounts for ss, medicare, and the ees share of any state unemployment
insurance. deductions that cannot be deducted from gross income for garnishment
purposes include union dues, health insurance, and retirement savings contributions.
which situation must exist for an individual to claim an additional withholding allowance
to reduce tax withholding? - Answer-the employee is single with one job.
individuals are allowed an exemption for each dependent; someone who relies on the
taxed individual for support and who falls within certain relationship, support, residency,
and age requirements
the purpose of the earned income credit is to... - Answer-reduce taxable income!
a state tax credit which has the effect of decreasing federal income taxes deducted from
an employees wages.
which type of report does not originate from the employees earning record?
a. taxable wages for each ee
b. calc of the appropriate tax rates
c. a report of form 1099 earnings
d. payroll analysis report - Answer-c. a report of 1099 earnings
of the following types of accumulators, which one accumulates values over a period of
time?
a. segment accumulator
b. balance accumulator
c. compunding accumulator
d. composite accumulator - Answer-b. balancing accumulator
an accumulator is an element in a payroll system that keeps a cumulative total of a
specified payroll deduction or earning. a balance accumulator includes totals for several
calculation periods that span a period of time such as a month or a year ago.
which types of documents must be stored separately from all other types of payroll
records? - Answer-a. garnishment reports.
all documentation relating to any garnishments against ees must be kept in a separate
locked cabinet.
