FPC Exam Fundamental Payroll Q&A
with complete solution.
668-W ~CORRECT ANSWER~✓✓Notice of Levy on Wages, Salary, and
Other Income
1096 ~CORRECT ANSWER~✓✓Annual Summary and Transmittal of
U.S. Information Returns
Under the FLSA how old must a minor be to be employed? ~CORRECT
ANSWER~✓✓14
What is the FUTA tax rate? ~CORRECT ANSWER~✓✓6.0%
On form 941, the employer reports ~CORRECT ANSWER~✓✓Social
Security Wages
What is the formula for calculating an employees net pay? ~CORRECT
ANSWER~✓✓Gross pay-deductions for taxes- other deductions
Which plan discriminates in favor of highly compensated employees?
~CORRECT ANSWER~✓✓Nonqualified deferred compensation plans
,What is the federal minimum wage per hour on January 1, 2018?
~CORRECT ANSWER~✓✓$7.25
What law determines time limits with which employees must be paid
after wages are earned? ~CORRECT ANSWER~✓✓State Laws
Cafeteria plans are authorized by what internal revenue code section?
~CORRECT ANSWER~✓✓125
The direct deposit data sent to the bank after payroll processing is an
example of ~CORRECT ANSWER~✓✓Interface
What taxes, if any, must be withheld from payments to an independent
contractor who provided a tin? ~CORRECT ANSWER~✓✓No taxes are
withheld
An external audit: ~CORRECT ANSWER~✓✓Allows an objective
assessment of the financial statements.
Employees' privacy rights are governed by all of the following except:
~CORRECT ANSWER~✓✓Local Legislation
Under the FLSA, what basis is used to determine whether a non-
exempt employee is to be paid overtime? ~CORRECT
ANSWER~✓✓Hours worked in a work week
, Overtime payments are included in the calculation of what tax, if any?
~CORRECT ANSWER~✓✓They are included in all tax calculations
What is the 2018 wage base for social security tax? ~CORRECT
ANSWER~✓✓$128,400.00
If an employee does not have federal tax withheld and has not claimed
exempt, what must the employer do? ~CORRECT
ANSWER~✓✓Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of
the following tasks except: ~CORRECT ANSWER~✓✓Recognize
changes in laws and regulations
An employee's profit sharing bonus is payable in the year following his
death. How should the bonus be taxed and reported? ~CORRECT
ANSWER~✓✓Withhold no taxes and report the bonus on for 1099-misc.
In what ways can a computerized system increase the accuracy of
employees paychecks? ~CORRECT ANSWER~✓✓By reducing human
error
What federal taxes must an employer withhold from an employees
reported tips? ~CORRECT ANSWER~✓✓Federal income, social
security and medicare tax
with complete solution.
668-W ~CORRECT ANSWER~✓✓Notice of Levy on Wages, Salary, and
Other Income
1096 ~CORRECT ANSWER~✓✓Annual Summary and Transmittal of
U.S. Information Returns
Under the FLSA how old must a minor be to be employed? ~CORRECT
ANSWER~✓✓14
What is the FUTA tax rate? ~CORRECT ANSWER~✓✓6.0%
On form 941, the employer reports ~CORRECT ANSWER~✓✓Social
Security Wages
What is the formula for calculating an employees net pay? ~CORRECT
ANSWER~✓✓Gross pay-deductions for taxes- other deductions
Which plan discriminates in favor of highly compensated employees?
~CORRECT ANSWER~✓✓Nonqualified deferred compensation plans
,What is the federal minimum wage per hour on January 1, 2018?
~CORRECT ANSWER~✓✓$7.25
What law determines time limits with which employees must be paid
after wages are earned? ~CORRECT ANSWER~✓✓State Laws
Cafeteria plans are authorized by what internal revenue code section?
~CORRECT ANSWER~✓✓125
The direct deposit data sent to the bank after payroll processing is an
example of ~CORRECT ANSWER~✓✓Interface
What taxes, if any, must be withheld from payments to an independent
contractor who provided a tin? ~CORRECT ANSWER~✓✓No taxes are
withheld
An external audit: ~CORRECT ANSWER~✓✓Allows an objective
assessment of the financial statements.
Employees' privacy rights are governed by all of the following except:
~CORRECT ANSWER~✓✓Local Legislation
Under the FLSA, what basis is used to determine whether a non-
exempt employee is to be paid overtime? ~CORRECT
ANSWER~✓✓Hours worked in a work week
, Overtime payments are included in the calculation of what tax, if any?
~CORRECT ANSWER~✓✓They are included in all tax calculations
What is the 2018 wage base for social security tax? ~CORRECT
ANSWER~✓✓$128,400.00
If an employee does not have federal tax withheld and has not claimed
exempt, what must the employer do? ~CORRECT
ANSWER~✓✓Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of
the following tasks except: ~CORRECT ANSWER~✓✓Recognize
changes in laws and regulations
An employee's profit sharing bonus is payable in the year following his
death. How should the bonus be taxed and reported? ~CORRECT
ANSWER~✓✓Withhold no taxes and report the bonus on for 1099-misc.
In what ways can a computerized system increase the accuracy of
employees paychecks? ~CORRECT ANSWER~✓✓By reducing human
error
What federal taxes must an employer withhold from an employees
reported tips? ~CORRECT ANSWER~✓✓Federal income, social
security and medicare tax
