16 CPPQuest-exam
16 CPPQuest-exam
1. Which of the following features is LEAST likely to be considered when looking at the security of a
new payroll system?
2. Company deadlines for payroll data input documents are essential for:
3. An employee earns 300 per day and an additional 10 cents per hour for hours worked after 7:00
p.m. If an employee works from 2:00 p.m. to 11:00 p.m., with an unpaid meal break from 6:00
p.m. to 7:00 p.m., Monday through Friday, what is the employee’s weekly gross pay under the Fair
Labor Standards Act?
(A) $360
(B) $361
(C) $362
(D) $364
4. The BEST reason for tracking pay-related problem statistics is to enable Payroll to:
(A) identify root causes and take actions to prevent similar recurrences
(B) apologize to clients in a more professional manner
(C) direct problems to those who caused the problem
(D) justify more resources to handle more problems
(A) withhold and pay only the employees’ portion of social security and Medicare taxes on tips
(B) report taxes on tips separately when making an employment tax deposit
(C) report tips as wages on Form W-2 and pay the employer portion of social security and Medicare
taxes
(D) report and pay the employer portion of social security and Medicare taxes on the portion of cash
tips above the federal minimum wage
6. Transactions are recorded in chronological order into books of original entry called:
(A) registers
(B) vouchers
(C) invoices
(D) journals
7. The KEY advantage of using an automated time and attendance system is that it:
8. As part of the implementation of a new payroll system, all transactions from the most recent actual
payroll are processed in the new system prior to using the system to run payrolls. This is an exam-
ple of what type of testing?
(A) compliance
(B) back-up
(C) ongoing
(D) parallel
9. To exhibit good customer service skills, payroll staff must understand and be able to explain:
10. Under the FLSA, what is the compensation due an employee whose rate of pay is $8 per hour and
who is paid for 52 hours during a one-week period, including 8 hours of sick pay?
(A) $416
(B) $432
(C) $448
(D) $464
11. All of the following data elements are required to be maintained in the employee masterfile
EXCEPT:
13. The fact that transactions affect two separate accounts of a business is called:
14. A company pays all executives semimonthly. The FLSA requires all other employees to be paid on:
15. Calculate the employee's gross pay based on the following data:
Rate of pay per hour: 80.00
Working hours: 10:00 pm to 7:00 am
Work days in a week: 5
(A) 14,080.00
(B) 15,360.00
(C) 15,840.00
(D) 17,280.00
16. Which of the following answers BEST defines the term nonexempt under the FLSA?
17. For how many years must the employer’s copy of Form 940 be retained?
(A) 2
(B) 3
(C) 4
(D) 5
18. Copies of the production files and most recent payroll transactions are sent nightly to the parent
company in a remote location. This practice is part of what type of plan?
(A) security
(B) control
(C) disaster recovery
(D) maintenance
19. Employees who are not eligible for direct deposit and receive paychecks sent through the mail are
constructively paid:
21. Under the FLSA, how long are employers required to keep records relating to wages, hours, and
conditions of employment?
(A) 3 years
(B) 4 years or until the file is no longer active
(C) 7 years
(D) permanently
22. What is the payroll department manager responsible for in a company with strong internal controls?
23. The process of balancing multiple time sheets within a specified pay period utilizes a procedure
known as:
(A) $9,065.25
(B) $6,893.00
(C) $9,116.00
(D) $9,333.00
25. On what form must mistakenly paid wages, for which no repayment is made, be reported?
(A) W-2
(B) W-4
(C) 1099-R
(D) 1099-MISC
26. A report has been requested that is NOT a standard report from the system. This type of report is
called a(n):
28. For an employee earning $10.20 per hour and participating in a 401(k) plan with a deferral per pay
period of $50, compute the federal income taxable wages based on the following:
Biweekly pay period
Regular 80 hours
4 hours overtime
3 hours double-time
(A) $731.40
(B) $888.40
(C) $898.60
(D) $938.40
29. Which of the following statements is CORRECT regarding a federal tax levy?
(A) It does not have to be honored if any other garnishments have been served.
(B) It requires a new order for each pay period.
(C) It is limited only by the amount of the employee’s net pay.
(D) It is continued each pay period until a release of levy is received.
30. Penalties for failure to make timely deposits are determined by:
31. An employer may exclude a business expense reimbursement from income when the employee’s
expenses meet which of the following requirements?
33. At least how often must employers report noncash fringe benefits as income for federal tax with-
holding purposes?
34. Certain company records must be retained for four years to comply with regulations of which of the
following agencies?
36. From which of the following taxes are statutory workers’ compensation payments exempt?
37. Which of the following items represents an input interface to the payroll system?
38. A company has a gross payroll of $120,589.36 that is taxable for federal income, social security,
and Medicare taxes. Federal income tax withheld is $24,117.87; combined social security and
Medicare taxes withheld are $9,225.09. What is the company’s total payroll tax liability for this pay
period?
(A) $33,342.96
(B) $42,568.05
(C) $40,156.26
(D) $66,685.92
39. One reason many companies use a Zero Balance Checking Account is that:
(A) cash is available for investment until items are presented for payment at the company’s bank
(B) funds do not have to be deposited until the employee cashes the check
(C) the company receives interest on the account
(D) bank reconciliations are not required
42. All of the following steps are required when initiating direct deposit for an employee EXCEPT:
(A) prenotification
(B) receiving financial institution routing number
(C) getting authorization from the employee
(D) receiving employee’s bank account number
43. When paying supplemental wages along with regular wages WITHOUT specifying the amount
of each, how would a company determine the amount of income tax to withhold from the supple-
mental wages if the employee has been paid no supplemental wages so far during the year and the
supplemental wage payment is no more than $1,000,000?
(A) Withhold a flat 25% from the supplemental wages and withhold from regular wages using the
appropriate table.
(B) Withhold a flat 25% from the supplemental wages.
(C) Withhold income tax as if the total were a single wage payment for a regular payroll period.
(D) Compute income tax withholding on the regular wages separate from the supplemental wages.
44. An employer that deposits payroll taxes semiweekly incurs a tax liability of $55,000 on Tuesday
and a tax liability of $110,000 on Wednesday. When must the taxes be deposited?
45. Documenting payroll policies and procedures will provide all of the following results EXCEPT:
46. Which of the following records MUST be kept for four years?
48. Which of the following plans describes a cafeteria plan under section 125 of the Internal Revenue
code?
49. Using federal child support guidelines, calculate the maximum amount of support that can be with-
held from an employee’s semimonthly disposable earnings of $1,500.00. The employee is four
months in arrears in making child support payments and has no other dependents.
(A) $750.00
(B) $825.00
(C) $900.00
(D) $975.00
50. Employers in non-credit reduction states that pay their state unemployment taxes on time can
deduct up to what percentage from the full FUTA tax rate in calculating their FUTA tax payments?
(A) 0.6%
(B) 4.5%
(C) 5.4%
(D) 6.0%
51. Which of the following items determines the disposition of unclaimed wages?
(A) $723.07
(B) $782.61
(C) $800.00
(D) $869.57
53. Employee deferrals under section 401(k) are subject to which taxes?
54. What does it mean if, at the end of an accounting period, a company has a debit balance in a
liability account?
(A) The company has underdeposited taxes withheld from employee wages.
(B) The company has not yet paid the third party.
(C) The company has withheld too much from the employee.
(D) The company has paid to a third party more than was withheld from the employee.
55. All of the following factors are advantages of having an in-house developed system EXCEPT:
57. Which of the following statements describes a self-insured workers’ compensation plan?
59. An employee is paid $9 per hour plus a 10% differential for evening shifts. During the past week,
the employee worked 24 hours on the day shift and 24 hours on the evening shift. Under the FLSA,
what are the employee’s gross wages for the week?
(A) $378.00
(B) $432.00
(C) $439.20
(D) $491.44
60. Using the 2016 percentage method withholding tables, calculate the employee's withheld federal
income tax based on the following data:
Weekly pay frequency
Vacation earnings: $360.62
Regular compensation: $239.38
401(k) pre-tax deferral: $48.50
Married, 0 allowances
(A) $40.28
(B) $22.25
(C) $67.33
(D) $30.96
62. The Family and Medical Leave Act requires employers to maintain records for at least:
(A) 12 weeks
(B) 1 year
(C) 2 years
(D) 3 years
63. A nonexempt employee earns $400 per week for a normal schedule of 35 hours. Under the FLSA,
how much would this employee be due if 48 hours were worked?
(A) $400.00
(B) $594.40
(C) $548.64
(D) $433.32
64. How may federal income tax be withheld from separation pay and accrued vacation wages total-
ing $20,000 that are paid at the time of termination and identified separately on the employee’s pay
stub, if the employee has been paid $25,000 so far this year and had income tax withheld from her
most recent wage payment?
65. A payroll register for the pay period shows gross earnings of $300,000 and deductions of $120,000.
The entry to the payroll expense account would be:
(A) $120,000
(B) $180,000
(C) $300,000
(D) $420,000
67. When checking for phantom employees, which of the following actions should be taken?
68. An employee is to be awarded a net bonus of $2,000 as supplemental wages in 2016. Year-to-date
regular and supplemental earnings are $15,000. Using the current optional flat tax rate and social
security and Medicare tax rates, what should be the gross amount of the payment if the employee
lives and works in a state with no income tax?
(A) $2,969.56
(B) $2,906.98
(C) $2,666.67
(D) $2,883.92
69. Which form is used to request an employer identification number?
(A) I-9
(B) SS-4
(C) SS-5
(D) SS-8
71. With online input, what is the BEST way to control miscellaneous payments?
72. All of the following actions demonstrate a strong customer service orientation EXCEPT:
(A) employer requires substantiation of the amount, time, and business purpose of the facilities’ use
(B) employer incurs no substantial additional cost, except labor, to provide the facilities
(C) facilities are on the employer’s premises
(D) facilities qualify as a de minimis fringe
74. When an employer is advised by the IRS that an employee’s Form W-4 is invalid, what action must
the employer take?
(A) All future Forms W-4 must be sent to the IRS as long as the employee is being paid.
(B) Employers have no obligation to change exemptions unless notified by the employee through a
new Form W-4.
(C) Withhold on the basis of information provided by the IRS.
(D) The employer should send notice at the end of the quarter, requesting that the employee contact
the IRS to clear up the problem.
75. A team comprised of members of a department's staff with the intention of improving their own
process is a:
76. An employee who works for more than one employer and has exceeded the social security wage
base may:
77. When determining the value of employer-provided parking, which of the following valuation meth-
ods is allowed?
79. Which of the following steps is LEAST important during the parallel testing phase of a new payroll
system?
80. All of the following practices are acceptable to an external auditor EXCEPT:
82. Which of the following outcomes is the PRIMARY advantage of developing an in-house system?
83. An employee covered by group health insurance at the time his employment terminates to return to
school is entitled to COBRA continuation rights for:
(A) 12 months
(B) 18 months
(C) 24 months
(D) 30 months
(A) annually
(B) semi-annually
(C) quarterly
(D) monthly
85. An employee claims married and two withholding allowances on her 2016 Form W-4, is paid
$1,700 biweekly, and defers $50 per pay period to a 401(k) plan. Using the percentage method,
what is the total of the biweekly deductions from the employee's pay for federal income, social
security, and Medicare taxes?
(A) $245.81
(B) $253.31
(C) $139.13
(D) $193.91
(A) Have the payroll bank account reconciled in the payroll department.
(B) Have the payroll manager distribute paychecks.
(C) Place payroll checks under the personal control of the payroll manager.
(D) Have a person other than the person who requested and authorized the payments prepare the
payroll checks.
90. During 2016, an employee worked for company A and quit after earning $120,000. Later in the
same year the employee was hired by company B. With respect to social security, Medicare and
FUTA, how should company B treat the employee’s earnings as of the first wage payment?
(A) Start accumulating social security, Medicare, and FUTA wages, and withhold both social secu-
rity and Medicare taxes.
(B) Start accumulating Medicare wages only, and withhold only Medicare tax.
(C) Start accumulating social security, Medicare, and FUTA wages, but withhold Medicare tax only.
(D) Start accumulating Medicare wages only, but withhold both social security and Medicare taxes.
91. Which of the following documents proves an employee’s identity and authorization to work?
(A) income
(B) assets
(C) accruals
(D) expenses
93. An employee is paid a bonus of $1,500 with a regular biweekly wage payment of $2,000 in 2016
that is indicated separately on the employee’s pay stub. The employee has received no supplemen-
tal wages so far this year. The employee has an elective deferral of 5% of regular wages made to
the 401(k) plan each pay period. For federal income tax withholding purposes, the company uses
the optional flat rate for all bonuses and the percentage method for regular wage payments. The
employee’s W-4 claims married with 2 allowances. The employee has no state or local income taxes
or any other deductions. What is the employee’s net pay?
(A) $2,603.49
(B) $2,753.99
(C) $2,603.99
(D) $2,589.49
94. All of the following techniques would enhance the level of customer service EXCEPT:
95. The KEY difference between user guides and payroll policies and procedures is:
97. What is the effect of failing to record salaries that are earned but not paid at the end of an account-
ing period?
99. Which of the following authorities dictates the information provided on a payroll check stub?
100. Which of the following forms may be submitted to the IRS in order to receive a written determi-
nation of a worker’s status as an employee or independent contractor?