1. Which of the following would an employer need to file
quarterly?
A. Employee W-4 form
B. 1099-MISC forms
C. IRS Form 941
D. W-2 forms
Answer: C) IRS Form 941
Rationale: IRS Form 941 is used to report payroll taxes withheld
and is filed quarterly by employers.
2. 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.
,3. Which of the following best describes a "Cafeteria Plan"?
A. A type of retirement savings plan
B. A plan that allows employees to choose from a menu of benefits
options
C. A medical savings account for employees
D. A bonus structure plan for employees
Answer: B) A plan that allows employees to choose from a menu of
benefits options
Rationale: A Cafeteria Plan gives employees the flexibility to
choose from a variety of benefits options, such as healthcare,
dependent care, and other options, usually on a pre-tax basis.
4. What is the purpose of a garnishment?
A. To deduct money for voluntary employee benefits
B. To automatically deduct retirement contributions
C. To withhold part of an employee's wages to satisfy a debt
D. To track an employee's attendance
Answer: C) To withhold part of an employee's wages to satisfy a
debt
Rationale: Garnishments are typically court-ordered deductions
from an employee’s wages to pay debts such as child support or
unpaid loans.
, 5. Which of the following is true about payroll records?
A. Employers must retain payroll records for at least one year
B. Payroll records must be available for inspection by the IRS
upon request
C. Payroll records do not need to include employee hours worked
D. Employers are not required to keep records of tax withholdings
Answer: B) Payroll records must be available for inspection by the
IRS upon request
Rationale: Employers are required by law to keep payroll records,
including employee hours worked and tax withholdings, and to
make them available for inspection by the IRS if necessary.
6. Which of the following is an example of an involuntary
deduction from an employee’s wages?
A. Union dues
B. Retirement contributions
C. Federal income tax
D. Health insurance premium
Answer: C) Federal income tax
Rationale: Federal income tax is an involuntary deduction
required by the government based on an employee’s income level.
quarterly?
A. Employee W-4 form
B. 1099-MISC forms
C. IRS Form 941
D. W-2 forms
Answer: C) IRS Form 941
Rationale: IRS Form 941 is used to report payroll taxes withheld
and is filed quarterly by employers.
2. 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.
,3. Which of the following best describes a "Cafeteria Plan"?
A. A type of retirement savings plan
B. A plan that allows employees to choose from a menu of benefits
options
C. A medical savings account for employees
D. A bonus structure plan for employees
Answer: B) A plan that allows employees to choose from a menu of
benefits options
Rationale: A Cafeteria Plan gives employees the flexibility to
choose from a variety of benefits options, such as healthcare,
dependent care, and other options, usually on a pre-tax basis.
4. What is the purpose of a garnishment?
A. To deduct money for voluntary employee benefits
B. To automatically deduct retirement contributions
C. To withhold part of an employee's wages to satisfy a debt
D. To track an employee's attendance
Answer: C) To withhold part of an employee's wages to satisfy a
debt
Rationale: Garnishments are typically court-ordered deductions
from an employee’s wages to pay debts such as child support or
unpaid loans.
, 5. Which of the following is true about payroll records?
A. Employers must retain payroll records for at least one year
B. Payroll records must be available for inspection by the IRS
upon request
C. Payroll records do not need to include employee hours worked
D. Employers are not required to keep records of tax withholdings
Answer: B) Payroll records must be available for inspection by the
IRS upon request
Rationale: Employers are required by law to keep payroll records,
including employee hours worked and tax withholdings, and to
make them available for inspection by the IRS if necessary.
6. Which of the following is an example of an involuntary
deduction from an employee’s wages?
A. Union dues
B. Retirement contributions
C. Federal income tax
D. Health insurance premium
Answer: C) Federal income tax
Rationale: Federal income tax is an involuntary deduction
required by the government based on an employee’s income level.
