FPC Exam Fundamental Payroll
Questions and Answers16
668-W - ANSWERS -Notice of Levy on Wages, Salary, and Other Income
1096 - ANSWERS -Annual Summary and Transmittal of U.S. Information Returns
Under the FLSA how old must a minor be to be employed? - ANSWERS -14
What is the FUTA tax rate? - ANSWERS -6.0%
On form 941, the employer reports - ANSWERS -Social Security Wages
What is the formula for calculating an employees net pay? - ANSWERS -Gross pay-deductions
for taxes- other deductions
Which plan discriminates in favor of highly compensated employees? - ANSWERS -Nonqualified
deferred compensation plans
What is the federal minimum wage per hour on January 1, 2018? - ANSWERS -$7.25
What law determines time limits with which employees must be paid after wages are earned? -
ANSWERS -State Laws
Cafeteria plans are authorized by what internal revenue code section? - ANSWERS -125
,The direct deposit data sent to the bank after payroll processing is an example of - ANSWERS -
Interface
What taxes, if any, must be withheld from payments to an independent contractor who
provided a tin? - ANSWERS -No taxes are withheld
An external audit: - ANSWERS -Allows an objective assessment of the financial statements.
Employees' privacy rights are governed by all of the following except: - ANSWERS -Local
Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to be paid
overtime? - ANSWERS -Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any? - ANSWERS -They are
included in all tax calculations
What is the 2018 wage base for social security tax? - ANSWERS -$128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what must the
employer do? - ANSWERS -Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following tasks
except: - ANSWERS -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? - ANSWERS -Withhold no taxes and report the bonus on for
1099-misc.
, In what ways can a computerized system increase the accuracy of employees paychecks? -
ANSWERS -By reducing human error
What federal taxes must an employer withhold from an employees reported tips? - ANSWERS -
Federal income, social security and medicare tax
The main purpose of batch controls is to - ANSWERS -Validate data entry accuracy
Which of the following types of compensation is taxable? - ANSWERS -Backpay awards
What is used when calculating an employee's gross up? - ANSWERS -Net set
Employees can provide their employer with their marital status and allowances for income tax
withholding purposes by: - ANSWERS -Completing form W-4
Generally, what is the largest expense for most companies? - ANSWERS -Salaries and benefits
What authority controls the frequency with which employees must be paid? - ANSWERS -State
Laws
What is the general ledger? - ANSWERS -A record of transactions by account
What, if any, is the 2018 wage base for Medicare tax? - ANSWERS -There is no limit
An employer should remind employees to complete an amended W-4 if they have any changes
in status by - ANSWERS -December 1 of each year
Questions and Answers16
668-W - ANSWERS -Notice of Levy on Wages, Salary, and Other Income
1096 - ANSWERS -Annual Summary and Transmittal of U.S. Information Returns
Under the FLSA how old must a minor be to be employed? - ANSWERS -14
What is the FUTA tax rate? - ANSWERS -6.0%
On form 941, the employer reports - ANSWERS -Social Security Wages
What is the formula for calculating an employees net pay? - ANSWERS -Gross pay-deductions
for taxes- other deductions
Which plan discriminates in favor of highly compensated employees? - ANSWERS -Nonqualified
deferred compensation plans
What is the federal minimum wage per hour on January 1, 2018? - ANSWERS -$7.25
What law determines time limits with which employees must be paid after wages are earned? -
ANSWERS -State Laws
Cafeteria plans are authorized by what internal revenue code section? - ANSWERS -125
,The direct deposit data sent to the bank after payroll processing is an example of - ANSWERS -
Interface
What taxes, if any, must be withheld from payments to an independent contractor who
provided a tin? - ANSWERS -No taxes are withheld
An external audit: - ANSWERS -Allows an objective assessment of the financial statements.
Employees' privacy rights are governed by all of the following except: - ANSWERS -Local
Legislation
Under the FLSA, what basis is used to determine whether a non-exempt employee is to be paid
overtime? - ANSWERS -Hours worked in a work week
Overtime payments are included in the calculation of what tax, if any? - ANSWERS -They are
included in all tax calculations
What is the 2018 wage base for social security tax? - ANSWERS -$128,400.00
If an employee does not have federal tax withheld and has not claimed exempt, what must the
employer do? - ANSWERS -Provide the employee with the EITC notice
A computerized payroll system can help a payroll dept. accomplish all of the following tasks
except: - ANSWERS -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? - ANSWERS -Withhold no taxes and report the bonus on for
1099-misc.
, In what ways can a computerized system increase the accuracy of employees paychecks? -
ANSWERS -By reducing human error
What federal taxes must an employer withhold from an employees reported tips? - ANSWERS -
Federal income, social security and medicare tax
The main purpose of batch controls is to - ANSWERS -Validate data entry accuracy
Which of the following types of compensation is taxable? - ANSWERS -Backpay awards
What is used when calculating an employee's gross up? - ANSWERS -Net set
Employees can provide their employer with their marital status and allowances for income tax
withholding purposes by: - ANSWERS -Completing form W-4
Generally, what is the largest expense for most companies? - ANSWERS -Salaries and benefits
What authority controls the frequency with which employees must be paid? - ANSWERS -State
Laws
What is the general ledger? - ANSWERS -A record of transactions by account
What, if any, is the 2018 wage base for Medicare tax? - ANSWERS -There is no limit
An employer should remind employees to complete an amended W-4 if they have any changes
in status by - ANSWERS -December 1 of each year
