PF2 – MIDTERM EXAM ACTUAL QUESTIONS AND ANSWERS|LATEST 2025 UPDATE|100% CORRECT.

PF2 – MIDTERM EXAM ACTUAL QUESTIONS AND ANSWERS|LATEST 2025 UPDATE|100% CORRECT. 1. Mountain Bikes has a weekly payroll and is a regular remitter. What date will the source deductions for the February 1st payroll be due to the Canada Revenue Agency? A. February 10th B. February 15th C. February 25th D. March 15th 2. Anjani works in Manitoba and her 2019 payroll totals are regular earnings of $55,000.00, regular commission payments of $12,000.00, employer-provided automobile taxable benefit of $4,294.00 and employer-paid medical and dental benefits of $5,212.00.What amount would be reported using Code 40 in the Other Information area of Anjani's T4 slip? A. $4,294.00 B. $5,212.00 C. $9,506.00 D. No amount reported 3. Sharon contributes 5% of her annual earnings of $40,000.00 to her defined contribution pension plan. Her employer matches her contributions. Calculate Sharon's pension adjustment. PA = EE + ER + Volu + ForF PA = (40000x5%)+(40000x5%) = 4,000.00 4. Freehold Foods, an Alberta organization, is preparing its year-end information slips. Carrie had worked for the company in their Calgary office from July 1982 until her employment was terminated last year. When her employment was terminated, she was fully vested in the company’s defined contribution registered pension plan, which she joined in July 1984. Upon termination of employment, Carrie received a retiring allowance of $54,000.00. Carrie had her employer transfer the entire eligible amount to a RRSP and took the non-eligible amount in cash. Calculate the eligible and non-eligible portions of Carrie’s retiring allowance as well as the income tax withheld on the amount received in cash. Include these amounts when completing Carrie’s T4 slip. The $23,560.00 income tax shown on the year-end payroll register does not include the tax amount withheld on the retiring allowance. Complete Carrie’s T4 slip using the information from the year-end payroll register below. Note: The boxes in the Other Information area of the T4 must be completed in numerical order. Item Amount Regular earnings $58,900.0 0 Vacation pay $5,028.00 Bonus pay $3,500.00 Overtime pay $810.34 Taxable clothing allowance $675.00 Wages in lieu of notice $15,150.0 0 Retiring allowance $54,000.0 0 CPP contributions $2,748.90 EI premiums $860.22 Income tax $23,560.0 0 CPP pensionable earnings $57,400.0 0 EI insurable earnings $53,100.0 0 Union dues $480.00 Charitable donations $275.00 Employee contributions to the Registered Pension Plan $3,250.00 Employer contributions to the Registered Pension Plan $2,925.00 Registered Pension Plan number 1234567 Loan interest non-cash taxable benefit $1,939.85 Automobile non-cash taxable benefit $1,736.49 Group term life insurance non-cash taxable benefit $1,175.00 Accidental death and dismemberment non-cash taxable benefit $31.25 5. An accelerated threshold 1 remitter has a weekly payroll with total statutory deductions (including employer contributions) each pay period of $7,135.00. Their pay dates in the current month were on Friday the 1st, 8th, 15th, 22nd and 29th. Calculate the amount of the remittance due on the 25th of the current month. Anything from 1st to 15th will be remitted in the 25th 1st + 8th + 15th 7135+7135+7135 = $21405.00 6. Reese works in Prince Edward Island and has 2019 payroll totals of regular earnings of $62,700.00, vacation pay of $2,680.00, overtime pay of $518.00, interest-free loan taxable benefit of $780.00, group term life insurance taxable benefit of $314.00, pension adjustment of $2,880.00 and employee contributions to a Registered Retirement Savings Plan of $1,890.00. Calculate the total to be recorded in Box 14 of Reese's T4 information slip. Box 14 = 62700+2680+518+780+314 = $66,992.00 7. What method of accounting provides the most complete and accurate financial statements? A. Cash method of accounting B. Single-entry method of accounting C. Accrual method of accounting D. Compound method of accounting 8. When should final adjustments to taxable benefits be made? A. After each pay period B. Before the last payroll is processed for the tax year C. During month-end processes D. At the beginning of the next taxation year 9. What date determines the remittance period for statutory deductions withheld from a manual cheque? A. The closest regular payroll cheque date B. The next regular payroll cheque date C. The regular payroll cheque date when the earnings should have been paid D. The date of the manual cheque 10. Enviro Consulting Inc. operates from Monday to Friday and pays its employees on a weekly basis. On February 23 employees were paid for the week ending February 23, while on March 2 they are paid for the week ending March 2. Enviro’s salary and wages expense for the week ending February 23 was $87,360.00. The accounting month-end for February is February 28. How much will Enviro accrue for salaries and wages for the last week of February in the February accounting period in order to accurately reflect these costs for the month. (Note: The current year calendar provided in the course should be used). ( 87360 / 5 ) x 3 = $52416.00 11. To ensure that a Registered Retirement Savings Plan administrator receives contributions on time, the remittance of employee deductions and any employer contributions should be: A. one day after the pay day B. any day after the pay day C. no later than pay day D. anytime after the pay period ending date 12. Adjustments made to employee year-to-date earnings should be: A. recorded when a Pensionable and Insurable Earnings Review is requested B. accumulated and adjusted with semi-annual reconciliation C. recorded as the adjustments occur D. accumulated and adjusted at year-end 13. The Canada Revenue Agency requires mandatory electronic filing when employers file a total of more than: A. 25 of each type of information slips B. 25 various information slips C. 50 of each type of information slips D. 50 various information slips 14. An employer in Québec has a monthly group health benefit premium of $3,642.00, excluding taxes. Calculate the payment to be remitted to the benefit carrier. 3642 x 1.09 = 3969.78 15. Which province has no pension legislation enacted and therefore defaults to the Pension Benefits Standards Act? A. Saskatchewan B. Newfoundland and Labrador C. Québec D. Prince Edward Island 16. Taxable benefits should be included in an employee's income: A. each pay period as they are enjoyed or received B. within one month of being enjoyed or received C. within one year of being enjoyed or received D. by the end of the calendar year in which they are enjoyed or received 17. Rose was paid a retiring allowance of $86,000.00 when her employment was terminated in May 2020. Rose started with the organization in August of 1981 and joined the company pension plan in August 1984. She was fully vested when her employment was terminated. Calculate the portion of Rose's retiring allowance that will be eligible for transfer to a Registered Retirement Savings Plan. 1996 – 1981 = 15 x 2000 = $30,000.00 1984 – 1981 = 3 x 1500 = $4,500.00 34,500.00 Eligible Portion 18. Given the following information from the payroll register, calculate the net pay and prepare a journal entry for the month of February for Mars Motors. Salaries and wages $354,217.72 Bonus $13,317.36 Canada Pension Plan contributions $16,955.27 Employment Insurance premiums $6,907.26 Income tax $73,507.02 Registered Retirement Savings Plan contributions $10,810.46 Union dues $2,110.00 Charitable donations $935.00 Salaries and Wages Expenses $354,217.72 Bonus Expense $13,317.36 Canada Pensiona Plan Payable 16955.27 Employment Insurance premium Payable 6907.26 Income Tax Payable 73507.02 RRSP Payable 10810.46 Union dues Payable 2110.00 Donations Payable 935.00 Net Wages Payable $256,310.0 7 19. Fleetway Transport is an Accelerated threshold 1 remitter. The statutory deductions withheld from the three bi-weekly payrolls in June are as follows: • On the June 1 pay, the employees’ Canada Pension Plan contributions were $3,658.20, their Employment Insurance premiums were $1,295.40, their federal income tax withholding was $13,157.33 and their provincial income tax (non-Québec) withholding was $6,054.65. • On the June 15 pay, the employees’ Canada Pension Plan contributions were $4,558.20, their Employment Insurance premiums were $2,275.40, their federal income tax withholding was $14,157.33 and their provincial income tax (non-Québec) withholding was $7,854.65. • On the June 29 pay, the employees’ Canada Pension Plan contributions were $3,558.20, their Employment Insurance premiums were $1,275.40, their federal income tax withholding was $12,157.33 and their provincial income tax (non-Québec) withholding was $6,854.65. • The employer does not have a reduced Employment Insurance premium rate. Calculate the total amount to be remitted to the Canada Revenue Agency on July 10. Payments from 1st of the month to 15th of the month will be remitted in 25th of the month Payments from 16th to end of the month will be remitted in 10th of the following month Total Remittance = CPP EE + CPP ER + (EI EE + EI ER) + FED Tax + PRO Tax Total remittance=(3558.20x2) + (1275.40)+(1275.40x1.4)+ (12157.33)+(6854.65) = $29189.34 20. The T4 – Statement of Remuneration Paid must be completed for each person who received remuneration with respect to employment, except when: A. remuneration is less than $500.00 B. deductions for income tax were required C. any amount of group term life insurance was provided D. deductions for Canada Pension Plan contributions or Employment Insurance premiums were required 21. The salaries and wages incurred, for employees who actually perform the work or provide the service or sell goods, are referred to as: A. direct labour costs B. indirect labour costs C. employee benefits expenses D. commission expenses 22. Liability account balances are closed or cleared to zero: A. when the liability is paid B. monthly C. quarterly D. annually 23. After reconciling the payroll accounts for the month of June, you noticed you have made an error and overpaid the amount owing to the Canada Revenue Agency for source deductions. How should this calculation error be corrected? A. Reconcile the payment at year-end B. Request a refund C. Wait for Canada Revenue Agency to advise that there is a discrepancy D. Deduct the overpayment from the next remittance 24. When the remittance date falls on a weekend or statutory holiday, an employer should ensure that the Canada Revenue Agency is in receipt of the funds: A. by the previous business date B. by the next business date C. which are postmarked on the weekend or statutory holiday D. there are no restrictions 25. Lori contributes 2% of her annual earnings of $38,900.00 to her defined contribution pension plan. Her employer matches her contributions. Calculate Lori's pension adjustment. 38900 x 2% x 2= 1556.00 26. The entry to record the expense of an employee's vacation pay accrual would be: A. debit vacation pay expense; credit bank B. debit vacation pay expense; credit vacation pay payable C. debit vacation pay payable; credit vacation pay expense D. debit bank; credit vacation pay expense 27. An employer in Québec has deducted a total of $3,462.00 from the current payroll for Employment Insurance premiums. Calculate the total Employment Insurance premium remittance owing to the Canada Revenue Agency on this payroll, assuming they do not have a reduced rate. 3462 x 2.4 = 8308.80 OR (3462)+(3462x1.4) = 8308.80 28. Which type of account shows the owners' or shareholders' worth or interest in the organization? A. Revenue B. Asset C. Liability D. Equity 29. Code 67 on the T4 is used to report: A. eligible retiring allowances B. Indian (exempt income) non-eligible retiring allowances C. Indian (exempt income) eligible retiring allowances D. non-eligible retiring allowances 30. Employer contributions for defined contribution pension plans are generally remitted to: A. the funding agent B. Director of Pensions C. the Canada Revenue Agency D. Revenu Québec 31. An employer's accrual for labour costs would be a: A. annual accrual B. continuous accrual C. specific accrual D. quarterly accrual 32. Which of the following statutory deductions are remitted to the Canada Revenue Agency (CRA) for a Québec employee? A. Canada Pension Plan contributions B. Québec Parental Insurance Plan premiums C. Employment Insurance premiums D. Québec provincial income tax 33. Which of the following items appears on a Balance Sheet? A. Liabilities B. Expenses C. Revenue D. Net Profit. 34. When are voluntary deductions withheld from an employee’s pay? A. Before statutory and legal deductions B. Voluntary deductions are never withheld from an employee’s pay C. At the same time as statutory and legal deductions D. After statutory and legal deductions