Payroll Practice Test

[Pages:11]Payroll Practice Test

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Payroll Practice Test

Payroll Practice Test

Table of Contents

Payroll Practice Test...................................................................................................................................... 3 Payroll Practice Test Answer Sheet............................................................................................................. 11

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Payroll Practice Test

Payroll Practice Test

1. All states have set their minimum wage to be the same as the federal government. A) True B) False

2. The amounts needed for the payroll entries in the journal come from the employee's earnings record. A) True B) False

3. Which of the following acts levies a tax on employers and employees that is credited to the Federal Old-Age and Survivors' Trust Fund and the Federal Disability Insurance Trust Fund? A) Federal Income Tax Act B) Federal Insurance Contributions Act C) Fair Labor Standards Act D) Federal Unemployment Tax Act E) Employee Retirement Income Security Act

4. Which of the following records lists all employees who earn remuneration, the amount of remuneration, the deductions, and the net amount paid for each payroll period? A) Employee history record B) Change in payroll rate form C) Payroll register D) Reference inquiry form E) None of the above

5. Institutions of higher education are extended coverage under FLSA without regard to their annual sales volume. A) True B) False

6. Under the piece-rate system, workers are paid according to their output. A) True B) False

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Payroll Practice Test

7. The tips received by a tipped employee are less than $5.12 of the minimum hourly tip credit rate. The maximum permissible tip credit is: A) $30 a month. B) $5.12 an hour. C) 45% of the employee's minimum wage. D) 50% of the employee's minimum wage. E) the amount of tips actually received by the employee.

8. The Wage and Hour Division allows the practice of recording an employee's starting and stopping time to: A) the nearest five minutes. B) the nearest tenth of an hour. C) the nearest quarter of an hour. D) all of the above. E) none of the above.

9. The Federal Insurance Contributions Act levies a tax upon the gross earnings of selfemployed persons. A) True B) False

10. FICA defines wages as including the cash value of meals provided for the convenience of the employees. A) True B) False

11. Employees are liable for their FICA taxes only until the taxes have been collected from their pay by their employer. A) True B) False

12. Each of the following items is accurately defined under FICA as taxable wages except: A) value of meals furnished employees for the employer's convenience. B) value of meals furnished employers for the employees' convenience. C) commissions. D) dismissal pay. E) $500 award for productivity improvement suggestion.

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Payroll Practice Test

13. The OASDI taxable wage base is correctly defined as: A) all amounts earned by an employee during a calendar year. B) the maximum amount of wages during a calendar year that is subject to the OASDI tax. C) all amounts paid an employee during a calendar year. D) all amounts either earned by, or paid to, an employee during a calendar year. E) none of the above.

14. In the case of a 401(k) plan, employees age 50 or over can shelter an extra $10,000 of their wages from federal income tax. A) True B) False

15. The special withholding allowance may be claimed only by those employees who do not itemize deductions on their income tax returns. A) True B) False

16. An employee submits an invalid Form W-4 to the employer and does not replace it with a valid form. The employer should withhold federal income taxes at the rate for a single person claiming no exemptions. A) True B) False

17. Which of the following statements correctly describes the withholding of federal income taxes and social security taxes on tips? A) Tips amounting to $10 or more in a calendar month must be reported by tipped employees to their employers. B) The withholding of federal income taxes on employees' reported tip income is made from the amount of tips reported by employees. C) When employees report taxable tips in connection with employment in which they also receive regular wages, the amount of tax to be withheld on the tips is computed as if the tips were a supplemental wage payment. D) Employers do not withhold FICA taxes on the tipped employees' reported tip income. E) None of the above statements are correct.

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Payroll Practice Test

18. Which of the following cannot be included in a cafeteria plan? A) Heath insurance B) Group-term life insurance (first $50,000 of coverage) C) Dependent care assistance (first $5,000) D) Self-insured medical reimbursement plan E) Educational assistance

19. Unemployment taxes (FUTA and SUTA) do not have to be paid by an employer who has only part-time employees. A) True B) False

20. If an employee works in more than one state, the employer must pay a separate SUTA tax to each of those states in which the employee earns wages. A) True B) False

21. Educational assistance payments made to workers to improve skills required of their jobs are nontaxable for unemployment purposes. A) True B) False

22. Included under the definition of employees for FUTA purposes are: A) independent contractors. B) insurance agents paid solely on commission C) student nurses. D) officers of a corporation E) members of partnerships

23. The person who is not an authorized signer of Form 940 is: A) the individual, if a sole proprietorship. B) the accountant from the company's independent auditing firm. C) the president, if a corporation. D) a fiduciary, if a trust. E) All of the above are authorized signers.

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Payroll Practice Test

24. In order to prepare Forms W-2, an employer would utilize the employee's earnings record. A) True B) False

25. The payroll taxes incurred by an employer are FICA, FUTA, and SUTA. A) True B) False

26. The garnishment that takes priority over all others is: A) a federal tax levy B) a government student loan C) a creditor garnishment D) an administrative wage garnishment E) a child support order

27. In recording the monthly adjusting entry for accrued wages at the end of the accounting period, the amount of the adjustment would usually be determined by: A) collecting the timesheets for the days accrued. B) using the same amount as the prior month's adjustment. C) using the wages of the salaried workers only. D) a percentage of the previous week's gross payroll. E) a percentage of the previous week's net payroll.

Refer to Exhibit A for Questions 28-30

28. What is the income tax to withhold from the biweekly wages of employee Alan Glasgow (married, 1 allowance), $980 wages? A) $66.00 B) $35.00 C) $49.00 D) $51.00

29. What is the income tax to withhold from the biweekly wages of employee Joseph Kerr (single, 4 allowances), $720 wages? A) $1.00 B) $18.00 C) $0.00 D) $3.00

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Payroll Practice Test

30. What is the income tax to withhold from the biweekly wages of employee Ginni Lorenz (single, 1 allowance), $580 wages? A) $35.00 B) $33.00 C) $57.00 D) $19.00

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