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APA FPC-Remote Fundamental Payroll Certification Exam Practice Test

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Total 133 questions

Fundamental Payroll Certification Questions and Answers

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Question 1

For her 10 years of service, an employee was given a gold necklace valued at $100. Which of the following is true?

Options:

A.

the gift must be included in her taxable compensation

B.

the gift is tax free

C.

only social security and medicare tax should be withheld on the fair market value of the award

D.

only federal income tax should be withheld on the fair market value of the award

Question 2

Which of the following plans can discriminate in favor of highly compensation employees?

Options:

A.

section 125 plans

B.

defined contribution plans

C.

401k plans

D.

nonqualified deferred compensation plans

Question 3

Checking inputs or outputs against predetermined constraints is called:

Options:

A.

internal control

B.

validity edit

C.

system safeguard

D.

parallel test

Question 4

Salaries earned but not yet paid in the current month must be recorded as:

Options:

A.

debit to salary payable

B.

credit to salary expense

C.

debit to cash

D.

debit to salary expense

Question 5

When an employee is overpaid and the repayment occurs in the same year, the repayment requested is the employee's

Options:

A.

net overpayment

B.

gross overpayment

C.

gross overpayment minus social security and medicare tax

D.

gross overpayment minus federal income tax

Question 6

If an employee provides an invalid form w4, the employer must:

Options:

A.

accept the form until the employee completes a new form.

B.

implement the form and notify the IRS

C.

refuse to accept the form

D.

implement the form as is

Question 7

when does an employer stop deducting a federal tax levy from an employee's wages?

Options:

A.

the amount on the levy is reached

B.

The IRS issues a form 668-D

C.

the employee asks that the levy deduction be stopped

Question 8

You receive a letter of inquiry concerning an employee. What should you do?

Options:

A.

follow your companys policy on the release of employee info

B.

ignore the letter becuase its the employees issue

C.

send a short letter to the agency stating that the issue is being reviewed.

D.

call the requested and tell them you plan to locate the info and send it in a few months.`

Question 9

When making a supplemental wage payment to an employee whose supplemental YTD wages exceed $1,000,000 what tax rate is used to calculate federal income tax withholding?

Options:

A.

6%

B.

22%

C.

24%

D.

37%

Question 10

If you need very rapid response time with minimal lag between input and output into your computer system, look for:

Options:

A.

batch processing

B.

remote entry processing

C.

real time processing

D.

network processing

Question 11

For a payment after the employees death in the year AFTER the death, what taxes, if any, will be withheld?

Options:

A.

federal income tax only

B.

social security and medicare taxes only

C.

federal income and social security and medicare taxes

D.

no taxes will be withheld

Question 12

Which plan is specifically set up for government employees?

Options:

A.

401k plan

B.

457b plan

C.

403b plan

D.

nonqualified deferred compensation plan

Question 13

Which of the following is the best method of guarding against phantom employees?

Options:

A.

monthly bank reconciliation

B.

validity edits

C.

physical payout

D.

audit trails

Question 14

When paying supplemental wages, when must the aggregate withholding method be used?

Options:

A.

when no income tax is withheld from regular wages for the current or preceding year

B.

when the employee claims more than 10 dependents

C.

when the employee doesnt complete a form W4

D.

when the employee claims heads of household

Question 15

In what part of a 2020 form w4 does an employee claim dependents?

Options:

A.

step 3

B.

writing below step 4c

C.

step 2

D.

dependents are not claimed on form W4

Question 16

All of the following are payroll control procedures EXCEPT:

Options:

A.

external audits

B.

edits

C.

system selection

D.

security

Question 17

At the beginning of the year, an employee elected to buy group term life insurance as part of his benefit package through his companys cafeteria benefit plan. in may he took out an individual life insurance policy. since he no longer needs group coverage, he wants to replace the insurance option with increase contributions to his 401k plans. is this possible?

Options:

A.

yes, if both GTL and the 401k plan are part of the same cafeteria benefit program, he can switch

B.

yes but he will have to pay taxes on the amount.

C.

no

Question 18

All of the following regulate payments made by DD EXCEPT:

Options:

A.

consumer financial protection bureau

B.

NACHA

C.

State laws

D.

local laws

Question 19

In 2020, an employer must pay social security tax on an employees wages up to:

Options:

A.

127,200

B.

$128,400

C.

132,900

D.

137,700

Question 20

When supplemental wages are paid at the same time as regular wages, how are withholding taxes computer?

Options:

A.

withholding on supplemental wages is taxed separately

B.

withholding taxes are based on the total of the wages and supplemental wages

C.

supplemental wages are not subject to withholding taxes

D.

supplemental wages are taxed at a different withholding rate

Question 21

All of the following statements about FLSA overtime regulations are true EXCEPT:

Options:

A.

a bonus paid under a union contract is included in the regular rate of pay

B.

a holiday bonus, paid at the discretion of the employer is excluded from the regular rate of pay

C.

the weeks regular rate of pay must include shift premiums

D.

employers must pay overtime when employees work more than 8 hours in a workday.

Question 22

All of the following issues are concerns of external auditors except:

Options:

A.

safeguarding of the firms financial assets

B.

risks to the companys financial well being

C.

efficiency of payroll procedures

D.

material misstatements of financial statements

Question 23

Last week, a high school teacher spent 40 hours in the classroom, worked 10 hours grading papers and was required to put in another 8 hours on saturday at the school sponsored science fair. under the FLSA, what overtime hours, if any, must the teacher be paid?

Options:

A.

time and a one half for 0 hours

B.

time and a one half for 8 hours

C.

time and a one half for 10 hours

D.

time and a one half for 18 hours

Question 24

Which of the following records must be kept for 4 years:

Options:

A.

OSHA records

B.

time cards

C.

voided payroll checks

D.

hours worked

Question 25

The owners of a company want to set up a retirement program for themselves, but do not want to make contributions on behalf of their employees. all of their employees are under age 30. What can they do?

Options:

A.

establish only a 401k plan that restricts eligibility to employees over age 30.

B.

set up nonqualified deferred compensation plan only

C.

establish only a 401k plan that restricts eligibility to employees over age 30, and set up a nonqualified deferred compensation plan.

D.

establish a 403b plan for all employees

Question 26

All of the following types of employees are classified as exempt from the FLSAs min wage and OT requirements except:

Options:

A.

professional

B.

outside salesperson

C.

administrative

D.

computer repairman

Question 27

A semiweekly depositor has a liability of $79,000 from Weds payday and a liability of $50,000 from Friday's payday. The deposit is due by the:

Options:

A.

next monday

B.

next weds

C.

next friday

D.

15th of the month

Question 28

All of the following are reasons payroll keeps records except:

Options:

A.

compliance with laws

B.

demonstrate accuracy of paychecks

C.

demonstrate security of payroll

D.

periodic reporting

Question 29

What does an employer use to calculate the amount to withhold for an IRS tax levy?

Options:

A.

disposable pay

B.

net pay

C.

take home pay

D.

taxable wages

Question 30

A semiweekly depositor that has a payroll tax liability of $50,000 from a Monday payroll must deposit the liability by:

Options:

A.

tues

B.

weds

C.

thurs

D.

fri

Question 31

One of the options in an employee's cafeteria benefit plan is a dependent care flexible spending account. He earmarked $100 per month to the account to pay for child care but spend only $1000 by the end of the plans grace period. at the end of the grace period, what happens to the $200 left in the account?

Options:

A.

the amount is forfeited

B.

it will be added to his taxable income

C.

he can use it to "buy" ab additional benefit

D.

it ill carry over to the next year

Question 32

All of the following features are present in a qualified plan except:

Options:

A.

discriminator in favor of highly compensated employees

B.

written documentation

C.

benefits for employees

D.

the right to benefits is nontrasferrable

Question 33

Which of the following events would require an employee to fill out an amended form w4 within 10 days of its occurrence?

Options:

A.

employee becomes legally separated from his or her spouse who was claimed as a dependent

B.

employees spouse quits job to stay home with a new baby

C.

death of a spouse

D.

adoption of a kid

Question 34

a retail sales clerk took advantage of the company's employee discount program to purchase clothes at 10% off the normal retail price. this service represents:

Options:

A.

taxable compensation

B.

a qualified employee discount

C.

a working condition fringe

D.

a no-additional cost service

Question 35

All of the following are tax implications of a cafeteria plan except:

Options:

A.

no income tax withholding

B.

no social security and medicare tax withholding

C.

must withhold income, social security, and medicare taxes

D.

no form W2 reporting

Question 36

All of the following deferred compensation plans limit the employee to making a deferral contribution of $19,500 in 2020 except:

Options:

A.

401k

B.

403b

C.

457b

D.

nonqualified

Question 37

Internal control procedures include all of the following except:

Options:

A.

system interfaces

B.

rotation of duties

C.

segregating jobs

D.

account reconciliation

Question 38

If a state wage and hour law requires that a nonexempt employee be paid an overtime premium when the employee works more than 8 hours in a day and the employee works the following schedule, how many overtime hours must the employee be paid?

sun-5

mon-7

tues-6

weds-8

thurs-10

fri-8

sat-6

Options:

A.

0

B.

2

C.

10

D.

14

Question 39

A receptionist has agreed to work afternoons at the company until the company can find a full time replacement. what is the receptionists status?

Options:

A.

independent contractor under common law

B.

independent contractor under reasonable basis

C.

employee

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Total 133 questions