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Payroll Accounting 2024 10e By Jeanette Landin, Paulette Schirmer (Test Bank All Chapters, 100% Original Verified, A+ Grade) Answers At The End Of Each Chapter Chapter 1:__________ 1) Payroll errors can lead to underreported wages and staffing issues. ⊚ true ⊚ false

2) The Lilly Ledbetter Act of 2009 reinforced the provisions of the Current Tax Payment Act by

enforcing tax remittance within 180 days. ⊚ true ⊚ false

3) The Occupational Safety and Health Act of 1970 added personal protective equipment

standards during 2020. ⊚ true ⊚ false

4) Employee retirement benefits are a recruiting and retention strategy used by businesses. ⊚ true ⊚ false

5) The Family Medical Leave Act provided paid leave and guaranteed job retention for

employees. ⊚ true ⊚ false

6) Workers may access partial Social Security retirement benefits at age 62. ⊚ true ⊚ false

7) The Fair Labor Standards Act has two levels of coverage: individual and enterprise. ⊚ true ⊚ false

8) The ethical principle of integrity pertains to standards for remaining current with payroll

professional development and certification. ⊚ true ⊚ false

9) Contemporary payroll practices involve the use of cloud-based software. ⊚ true ⊚ false

10) The use of payroll apps shifts the onus for payroll accuracy from the employer to the

employee. ⊚ true ⊚ false

11) The Personal Responsibility, Work and Family Promotion Act of 2002 mandated that new

employees must be reported to state employment offices within how many days of the employee commencing employment? A) 30 B) 25 C) 20 D) 15

12) Which Act required the reporting of COVID-19-related leave? A) DOMA B) ARPA C) FMLA D) FFCRA

13) During which decade were many landmark payroll legislation pieces enacted? A) 1910s B) 1920s C) 1930s D) 1940s

14) Which federal act assists workers who are displaced through no fault of their own? A) HIPAA B) FUTA C) SUTA D) ERISA

15) As of 2023, at what age may people born after 1960 receive full Social Security retirement

benefits? A) 62 B) 65 C) 67 D) 69

16) Which Act created the classification of workers as exempt or nonexempt? A) SSA B) FICA C) CTPA D) FLSA

17) Which of the following employer obligation is an insurance policy, not legislation? A) Sarbanes-Oxley B) Workers’ compensation C) Walsh-Healey D) Davis-Bacon

18) Which ethical principle emphasizes the use of moral judgment in all actions? A) Professionalism B) Confidentiality C) Integrity D) Due Care

19) Which of the following situations would not potentially comprise a payroll accountant’s

objectivity or independence, according to the PCAOB? A) Personal or family ownership of <1 percent of company shares B) Commitment to present or future financial interest in a client’s business C) Personal engagement with a client’s firm in terms of ownership D) Purchase of greater than five percent of the company’s shares

20) Employment legislation during the 1960s included which of the following Acts: A) FLSA, FUTA, and FICA. B) Civil Rights Act, ADEA, and Equal Pay Act. C) CTPA, FICA, and ERISA. D) DOMA, FMLA, and PRWOR.

21) The main purpose of the Current Tax Payment Act was to: A) ensure that all employees pay appropriate taxes. B) maintain legal eligibility to work in the United States. C) mandate employer remittance of taxes withheld from employees. D) provide benefits for workers who were displaced from jobs.

22) Which act adds monetary penalties for illegal discriminatory employer actions? A) Civil Rights Act of 1964 B) Davis-Bacon Act C) Americans with Disabilities Act D) Civil Rights Act of 1991

23) Which of the following legislation specifically pertains to government contractors? A) ADEA and ERISA B) Davis-Bacon Act and Walsh-Healey Act C) FLSA and FICA D) DOMA and FMLA

24) Which Amendment to the U.S. Constitution mandated a federal income tax for employees? A) 13th Amendment B) 16th Amendment C) 20th Amendment D) 24th Amendment

25) What form should employers use to determine if a worker is an employee or independent

contractor? A) Form W-2 B) Form 941 C) Form 1099 D) Form SS-8

26) Employees may be classified as exempt or nonexempt because of provisions of the: A) Current Tax Payment Act. B) Sixteenth Amendment to the US Constitution. C) Social Security Act. D) Fair Labor Standards Act.

27) Which of the following is among the guidelines for a payroll code of ethics? A) Reporting B) Accountability C) Integrity D) Interdependence

28) The accounting employees at Redwood Roofing have not attended professional development

training in two years. Which ethical principle have they violated? A) Confidentiality B) Professionalism C) Professional Competence and Due Care D) Integrity

29) Emerson is the payroll accountant for WexWorks, Incorporated, and uses the on-site

company exercise facilities. During one of the exercise sessions, a coworker asks about pay rates for management at the company. Which ethical principle prevents Emerson from disclosing such information? A) Confidentiality B) Objectivity and Independence C) Integrity D) Professional Competence and Due Care

30) Peyton is an employee of Elite Engravings a family owned and operated firm. Peyton’s

relative, Tatum, asks to postpone payroll processing due to an urgent family issue. Which ethical principle might Tatum’s request violate? A) Objectivity and Independence B) Professional Competence and Due Care C) Integrity D) Professionalism

31) Morgan is the payroll accountant for the family’s company. A sibling has asked Morgan to

overlook their payroll tax liability for a pay period so they can have a little extra cash in their paycheck. Which ethical principle would Morgan violate if they complied with their brother’s request? A) Confidentiality B) Objectivity and Independence C) Integrity D) Professionalism

32) Emery is the owner of a motel franchise. When the payroll accountant quit, Emery took over

the payroll responsibilities. Emery has had no training in payroll practices. Which ethical principle most closely describes Emery’s takeover of the franchise’s payroll? A) Objectivity and Independence B) Integrity C) Professional Competence and Due Care D) Confidentiality

33) Which most closely identifies why it is important for payroll accountants to adhere to a Code

of Ethics? A) To maintain company profitability B) To overlook fraudulent actions of company officers C) To protect the assets of the company and remit money owed to the government D) To maintain personal standards only

34) In the event of an ethical breach by a payroll accountant, which entity is ultimately liable for

any monetary damages due to stakeholders? A) The payroll accountant B) The company, its CEO, or president C) The governmental entity associated with company oversight D) The entity that issued the license to the accountant

35) Contemporary payroll practices reflect: A) a shift toward manual payroll processing for security concerns. B) the decrease in labor costs that reflects the effect of the economic recession. C) the transition to Internet- or cloud-based accounting software. D) the replacement of accounting personnel with computerized systems.

36) Which of the following is a challenge for payroll accountants? A) Electronic tax filing requirements B) Employees based only in one country C) Outsourced payroll processing as a default D) Lack of security available for online programs

37) What is a best practice for payroll accountants? A) Payroll should be regarded as a separate entity within a firm. B) Technology has impeded the development of global companies. C) Payroll is a tool for a firm’s strategic planning. D) Payroll accountants are not important to the decision-making process.

38) Which of the following is a payroll accountant’s responsibility when preparing payroll? A) B) C) D)

Withholding disbursements until after the pay date Use of manual computations for preparation Accessibility of payroll data to all company employees Accuracy of payroll computations and disbursement information

39) Which of the following is a payroll accountant’s responsibility? A) B) C) D)

Wage negotiations with prospective employees Construction contract negotiations with governmental entities Preparation for corporate safety audits Preparation of payroll tax returns

40) Which form does the Internal Revenue Service use to keep track of employees? A) SS-4 B) I-9 C) SS-8 D) W-4

41) Oakley is the CFO for Parsons Project Management. They have been notified of an

impending audit of all accounting records. What is Oakley's role in the audit? A) They are required to be absent during the audit to avoid influencing the results. B) They must agree to serve on the audit staff for other companies. C) They must be available to answer questions and grant access to payroll records. D) They must prevent privacy breaches by disallowing access to payroll records.

42) Which of the following is not a privacy act specifically pertaining to payroll records? A) Common Law Privacy Act B) Freedom of Information Act C) U.S. Department of Health and Human Services Privacy Act 09-40-0006 D) Computer Fraud and Abuse Act

43) Why do different methods of time collection devices (e.g., time cards, biometric devices)

exist among companies? A) They leverage artificial intelligence, bypassing human error. B) They reduce the need for payroll oversight. C) They promote accurate time measurement. D) They alleviate the need for internal control.

44) Which of the following is a payroll-related challenge that large companies may experience? A) Centralized reporting B) Ease of communication C) Homogeneous workforce D) Dispersed geographic locations

45) Ari’s Art Supply, a multi-state franchise, uses a company-maintained website to allow

employment management of their payroll records. What would be the most significant concern for the firm? A) Accuracy of employee-entered data B) Employer access to stored data C) Website access problems D) Personnel data security

46) One benefit of cloud-based payroll accounting is: A) an on-site standalone system dedicated to payroll processing. B) regularly scheduled software updates. C) access to all company personnel records. D) access by any company employee.

47) Sloan is a payroll accountant in a company that specializes in custom products. The biggest

payroll challenge is accurate allocation of labor to jobs. Which of the following represents the most accurate option to track the company's labor costs? A) Handwritten time slips with employee-reported time per job. B) Verbal reporting of time worked per job. C) Computer logins when employees change tasks. D) Radio-frequency time cards to track time allocations.

48) What is the most significant payroll challenge for small businesses? A) Availability of payroll-trained personnel B) Availability of accounting resources C) Accessibility of free on-site payroll software D) Accessibility of on-site payroll guidance

49) An example of an accounting software package that fosters cloud-based payroll processing

is: A) B) C) D)

SageBooks. Quick100. QuickBooks. GreatBooks.

50) Paycards represent a trend in payroll disbursement that alleviates the employee's need for a: A) timesheet. B) bank account. C) computer. D) supervisor.

51) The largest challenge to companies that use manual payroll processing is: A) payroll tax accuracy. B) integrating employee data. C) disbursing employee pay. D) filing appropriate governmental reports.

52) Why is outsourced payroll popular among accounting professionals? A) Payroll processing requires less oversight. B) Data generated by the outsourced company is completely accurate. C) Time demands for payroll processing decrease. D) Records generated by outsourced vendors are not subject to oversight.

53) Which law requires a company with federal contracts to use certified payroll for any contract

size? A) B) C) D)

Walsh-Healey Public Contracts Act Copeland Anti-Kickback Act Davis-Bacon Act Sarbanes-Oxley Act

54) Which court case updated the definition of spouse to include same-sex unions? A) Pollard v. DuPont B) Obergefell v. Hodges C) CIGNA v. Amara D) Young v. Wackenhut

55) _________ is the state counterpart of FUTA. A) Fair Labor Standards Act B) Worker’s compensation insurance C) State Income Tax Act D) State Unemployment Tax Act

56) Which of the following is true about independent contractors within the context of payroll? A) They are employees of the company. B) A temporary working relationship must exist. C) Tools and facilities are provided by the employer. D) The worker controls hours worked and exercises judgment.

57) Worker's compensation is an insurance policy used for: A) employer legal protection. B) payment of mandatory payroll taxes. C) wage continuation after job-related injuries. D) settlement of payroll-related lawsuits.

58) According to the PCAOB, personal or family ownership in excess of five percent of a client's

business may compromise a payroll accountant's: A) professional competence and due care. B) objectivity and independence. C) professionalism. D) integrity.

59) What was the purpose of the SECURE Act? A) Employee security B) Employer stability C) Retirement planning D) Website security

60) Which legislation did the PATH Act extend? A) FMLA B) FLSA C) ERISA D) ATRA

61) The _________ prohibited discrimination based on race, creed, color, gender, or national

origin. A) B) C) D)

Civil Rights Act of 1964 Civil Rights Act of 1991 Equal Pay Act of 1963 Fair Labor Standards Act of 1935

62) The _________ modified the statute of limitations imposed by the Equal Pay Act of 1963. A) Civil Rights Act of 1991 B) Lilly Ledbetter Fair Pay Act of 2009 C) Setting Every Community Up for Retirement Enhancement Act of 2020 D) Consolidated Omnibus Budget Reformation Act of 1986

63) The _________ mandated employer verification and reporting of an employee's legal ability

to work in the United States. A) Personal Responsibility and Work Opportunity Reconciliation Act of 1996 B) Immigration Reform and Control Act of 1986 C) American Reinvestment and Recovery Act of 2009 D) Protecting Americans from Tax Hikes Act of 2015

64) Payment of prevailing local wages for government contractors was mandated by the

_________. A) Davis-Bacon Act B) Walsh-Healey Public Contracts Act C) Fair Labor Standards Act D) Equal Pay Act

65) Congress passed the _________ and _________ to assist displaced workers. A) Federal Unemployment Tax Act; Social Security Insurance Act B) SECURE Act; Federal Unemployment Insurance Act C) 16th Amendment; Fair Labor Standards Act D) Federal Income Contributions Act; Federal Unemployment Tax Act

66) The ethical principle of _________ applies to the security of payroll records. A) professional competence and due care B) integrity C) confidentiality D) objectivity and independence

67) An accountant must remain impartial in all dealings, according to the ethical principle of

_________. A) professionalism B) objectivity and independence C) professional competence and due care D) integrity

68) Employers must request a(n) _________ by using form _________ for the Internal Revenue

Service to track a firm's payroll tax obligations. A) Social Security Number; W-4 B) Employer Registration Number; SS-8 C) Tax Identification Number; W-2 D) Employer Identification Number; SS-4

69) Companies use _________ and _________ to allow employees to have rapid, electronic

access to their compensation. A) cash; checks B) cash; direct deposit C) direct deposit; paycards D) paycards; checks

70) _________ is required under the Davis-Bacon Act for employers who engage with federal

contracts. A) Cloud-based payroll B) Centralized payroll C) Certified payroll D) Computerized payroll

71) The _________ instituted significant changes to payroll taxes, especially adjustments for

inflation and employee income tax computation. A) Protecting Americans from Tax Hikes Act B) Tax Cuts and Jobs Act C) Walsh-Healey Public Contracts Act D) Affordable Care Act

72) The Consolidated Appropriations Act included an increase in funding for the _________

program. A) Medicare B) PATH C) SECURE D) E-Verify

73) When an employer verifies an employee’s employment eligibility, _________ is mandatory

for but _________ is not. A) Form W-4; Form I-9 B) E-Verify; Form I-9 C) E-Verify; Form W-4 D) Form I-9; E-Verify

74) To re-verify an employee’s employment authorization, _________ must be used. A) B) C) D)

Form I-9 Form W-4 E-Verify Form W-2

75) A provision of the _________ made managers and supervisors ineligible to participate in the

tip pools, when used for tipped employees. A) Tipped Employees Act B) Tax Cuts and Jobs Act C) Consolidated Appropriations Act D) Equal Employment Act

76) The _________ granted small employers tax incentives for implementing automatic

retirement plan enrollment for their employees. A) PATH Act B) SECURE Act C) CAA Act D) SAFE AGE Act

77) The _________ represented sweeping changes to the tax code and reframed the computation

of employee income tax. A) Consolidated Appropriations Act B) Affordable Care Act C) Tax Cuts and Jobs Act D) E-Verify Act

Answer Key Test name: Chapter 1 1) TRUE 2) FALSE 3) TRUE 4) TRUE 5) FALSE 6) TRUE 7) TRUE 8) FALSE 9) TRUE 10) FALSE 11) C 12) D 13) C 14) B 15) C 16) D 17) B 18) B 19) A 20) B 21) C 22) D 23) B 24) B 25) D 26) D 27) C 28) C 29) A 30) D 31) B 32) C 33) C 34) B 35) C 36) A 37) C

38) D 39) D 40) D 41) C 42) B 43) C 44) D 45) D 46) B 47) D 48) A 49) C 50) B 51) A 52) C 53) C 54) B 55) D 56) D 57) C 58) B 59) C 60) D 61) A 62) B 63) B 64) A 65) A 66) C 67) B 68) D 69) C 70) C 71) B 72) D 73) D 74) A 75) C 76) B 77) C

Chapter 2:__________ 1) The two focuses of payroll procedures are company needs and governmental rules. ⊚ true ⊚ false

2) Employers may choose to omit the employees' home and mailing addresses in their employee

files. ⊚ true ⊚ false

3) All FLSA elements must appear on the Employee Information Form. ⊚ true ⊚ false

4) Semimonthly payroll may result in 25 pay periods during a one-year period. ⊚ true ⊚ false

5) Three IRS common-law tests exist to determine if a worker is an employee or independent

contractor. ⊚ true ⊚ false

6) New employees must be reported to state offices within 20 days of their initial start date. ⊚ true ⊚ false

7) United States workers in foreign subsidiaries are liable for all income taxes. ⊚ true ⊚ false

8) Pay frequency is the first payroll system decision a company must make. ⊚ true ⊚ false

9) An employee must meet all elements in the exemption tests to be classified as an exempt

employee. ⊚ true ⊚ false

10) Payroll data is only as accurate as the person who records it. ⊚ true ⊚ false

11) Which is the first decision an employer should make about its payroll procedures? A) How often to pay employees B) How to handle pay advances C) How many employees to hire D) Which employee benefits to offer

12) Which of the following items must exist in every employee's payroll file? A) Social security number B) Pay frequency C) Spouse's birth date D) Prior occupation

13) Why must pay rate information be a part of an employee’s payroll file? A) B) C) D)

As a means of tracking time worked for overtime compensation purposes To ensure that the employee receives all compensation earned As a means of ensuring pay equality among employees To document satisfaction of court-ordered obligations

14) Which of the following is a purpose of new hire reporting laws? A) To ensure payment of court-ordered obligations like garnishments and child support B) To keep track of workers throughout their careers C) To ensure consistent pay through an employee’s career D) To maintain the company’s business license

15) Which pay frequency has 52 pay periods annually? A) Daily B) Biweekly C) Semimonthly D) Weekly

16) Which pay frequency has 24 pay periods per year? A) Bimonthly B) Biweekly C) Semimonthly D) Semi-weekly

17) Which pay frequency usually has 26 pay periods annually? A) Daily B) Weekly C) Monthly D) Bi-weekly

18) Which form is required whenever any employee is hired? A) H-1 B) I-9 C) SS-8 D) W-2

19) Joni is the payroll accountant for a firm. She notes that the firm has hired a new employee.

What forms must she collect from the new employee? A) W-2 and I-8 B) W-4 and I-9 C) W-4 and I-8 D) W-3 and I-9

20) If a firm pays its employees semimonthly, how often does it disburse employee

compensation? A) Twice per month B) Every week C) Every two months D) Every three weeks

21) Why is it important for an employer to classify a worker as either an employee or an

independent contractor? A) For tax remittance purposes B) For child support obligations purposes C) For government tracking purposes D) For reimbursement purposes

22) Which of the following was part of the 2020 final rule distinguishing employees and

independent contractors? A) Amount of work performed B) Training requirements C) The importance of the work for the firm D) The type of labor performed

23) As a best practice, the employer should have the employee complete a new Form W-4: A) before each pay disbursement. B) each year, upon the employee's anniversary with the firm. C) every January 1. D) at the time of hire.

24) Murphy is a new employee of Justice Sports. To establish identity and employment

authorization, Murphy could present: A) a current United States passport. B) a library card and birth certificate. C) a driver's license and ATM card. D) a college transcript and driver's license.

25) Which items must be contained in every hiring packet issued by an employer? A) Forms W-4 and I-9 B) Employment contract with start date and pay agreement C) Descriptions of benefits and enrollment forms D) No items are mandated for issuance in a hiring packet.

26) New hires must be reported within _________ days from the date of hire to state authorities. A) 30 B) 20 C) 10 D) 3

27) Multistate employers must do which of the following for new hire reporting? A) File a new-hire report with the state office for each employee's state of residence B) File a report with the IRS since they have employees in multiple states C) File multistate registration form to designate which state will receive their new hire

reporting D) File new hire reports only in the state with the company’s headquarters

28) Which entity bears the responsibility for gaining approval for a foreign worker visa so a

foreign employee may work legally in the United States? A) The employer B) The employee C) The U.S. State Department D) The employer's home country

29) Haskell is a full-time worker whose primary occupation involves extensive overnight travel

to visit sites on the behalf of a single company. Which of the following classifications most accurately describes Haskell's employment status? A) Independent contractor B) Exempt employee C) Nonexempt employee D) Statutory employee

30) Valen is an employee of the foreign subsidiary of a United States based company who lives

and works in the United Kingdom. According to Foreign Account Tax Compliance Act (FATCA), how much of his wages may Valen exclude from United States' taxes, according to 2023 guidelines? A) $102,600 B) $108,900 C) $115,200 D) $120,000

31) Valen is an employee of the foreign subsidiary of a United States based company who lives

32) Which of the following factors could assist employers in determining employee pay rates? A) Employee marital status B) Company’s net income C) Employee FLSA status D) Industry type

33) Delta works in a company for which their primary job function is the manufacturing of

company products to consumers. Delta receives a percentage of each sale as part of their compensation. Their compensation contains a _________ element. A) piece-rate B) commission C) pay-for-performance D) nonexempt

34) Merrick works for a bakery for which part of their compensation is based on the sale of

wedding and other specialty cakes. Merrick’s compensation has a _________ element. A) performance incentive B) commission C) piece-rate D) nonexempt

35) Which of the following is subject to overtime in the process of hourly computations,

according to FLSA? A) Time worked during a given 24-hour period B) Holiday, sick time, and paid time off C) Time worked in excess of 40 hours per week D) Exempt employee weekend work

36) Which of the following is a necessary element in an accounting system? A) Internal secrecy B) Audit control C) Internal control D) Audit review

37) A payroll review process is the least complex when: A) the company has few employees. B) the company is not geographically dispersed. C) the company is centralized and uses one location. D) the company has multiple departments and many employees.

38) Outsourcing the payroll process: A) relieves the company of the task completion and the review process. B) relieves the company of certain task completion but not the review process. C) relieves the company of all liability for payroll completion and accuracy. D) relieves the company of the review process but not the task completion.

39) A company should assign _________ employee(s) the responsibility for signing payroll

checks and disbursements. A) a limited number of B) only one C) its most responsible D) managerial

40) Which of the following is a potential consequence of incorrect calculation of employee time

for payroll purposes? A) Federal penalties for not remitting all taxes due B) Erosion of available cash because of underpayments to employees C) Increased stakeholder approval due to employee overpayments D) An increase in employee morale

41) For payroll documentation purposes, when an employee needs time away from work: A) the supervisor should authorize it verbally. B) the employee should email only department colleagues. C) upper management must approve the request. D) the request should be documented, approved, and forwarded to the payroll clerk.

42) When a payroll clerk receives an approved request for an employee's time away from work,

he or she should: A) immediately place it in the employee's file. B) attach it to the employee's time collection report for the pay period. C) destroy the document in accordance with privacy laws. D) contact the employee to verify the request.

43) A company should restrict access to payroll files (paper and/or electronic) as a part of: A) file security internal controls B) audit trail requirements C) state requirements D) FLSA requirements

44) Which aspect of internal controls for payroll relates to the Sarbanes-Oxley Act? A) Protecting employee retirement funds B) Limiting the number of employees authorized to disburse payroll C) Cross-training employees and altering duties D) Ensuring the complexity of the audit trail

45) Employee file maintenance is the responsibility of the: A) employee. B) employer. C) payroll vendor. D) state government.

46) Computerized payroll records are considered a(n): A) open system. B) open access. C) closed system. D) closed access.

47) When developing the internal controls and record retention for a payroll system, a company

should: A) B) C) D)

involve all company employees to promote transparency. develop a closed system and alternate employee duties. designate a single employee with the responsibility for pay disbursements. train accounting personnel on a single payroll task.

48) The retention period for payroll documents commences: A) at the time an employee is hired. B) when an employee's first pay is disbursed. C) once the employee completes one year of service. D) when an employer terminates the worker’s employment.

49) Which of the following parties does not legally have access to a firm’s payroll records? A) B) C) D)

The IRS State revenue department employees Vendors of the firm The Department of Homeland Security

50) Which of the following is true about document retention requirements per the IRS statute of

limitations? A) Federal legislation requires documents to be retained for two years after the employee’s termination. B) Payroll records must be maintained for three years after termination. C) Union employees’ records must be retained for five years after termination. D) State legislation requires records to be retained for a minimum of eight years after termination.

51) Erica was an employee of the Cheshire Senior Hospice System. After she resigned her

employment, auditors discovered evidence of fraudulent activity that they traced to her. Erica's records must be retained: A) for 20 years. B) for 10 years. C) for 30 years. D) indefinitely.

52) Erica was an employee of the Cheshire Senior Hospice System. After she resigned her

employment, auditors discovered evidence of fraudulent activity that they traced to her. Erica's records must be retained: A) for 10 years. B) for 15 years. C) for 20 years. D) indefinitely.

53) Celyn’s employment with a company was terminated in South Carolina due to a reduction in

workforce. Which statement best describes the state's requirements for disbursement of the final pay? A) Within 48 hours B) By the last day of the following month C) On the next business day D) Within two weeks

54) Karter is terminated by a company in Alabama. According to state regulations, when must

Karter receive the final pay? A) On the next business day B) No standardized state guidelines exist C) Within seven business days D) At the next schedule payday

55) A firm needs to destroy paper payroll records after the end of the retention period. Which of

the following is not an option for destruction purposes? A) Shredding B) Discarding C) Pulping D) Burning

56) Ellis is the payroll clerk for a firm that maintains its payroll through computerized records on

a centralized server at the company headquarters. One of the responsibilities is employee file maintenance, including the destruction of records after the retention time has elapsed. His method of purging employee records is to delete the file from the database. What other record destruction procedures should Ellis follow? A) None. The method is acceptable. B) They should check all other employees' computers to ensure that the record is deleted. C) They should purge the record from the server. D) They should send an interoffice request to have someone in the information technology department remove the record from the server.

57) What is the difference between termination and resignation, as far as final pay is concerned? A) Resignation pay may be paid at the next regular pay date, but termination pay is

subject to state law. B) Resignation and termination pay are subject to state regulations. C) Resignation pay must be paid within one week and termination pay must be the next business day. D) Resignation pay must be paid on the next business day and termination pay is due immediately.

58) Upon termination, which of the following must be included in an employee’s final pay? A) B) C) D)

Hours worked Vacation previously paid Severance pay Sick time accrued but not used

59) A payroll accountant is preparing the final pay for a commission-based salesperson who has

resigned from the firm. What will happen to the salesperson's commissions that have been earned but not paid? A) The salesperson must receive resignation pay immediately and forfeits all unpaid commissions. B) The salesperson's final pay is delayed to allow for computation of commissions. C) The final pay must include all commissions earned, in accordance with any pay agreement. D) The employee must receive final non-commission pay immediately, but any commission pay will be delayed.

60) What types of records does IRS Regulation 26 CFR 1.6001 not cover? A) Manual pay records B) Computerized pay records C) Outsourced payroll records D) Independent contractor remittance

61) Well-designed internal controls prevent: A) legal compliance and file integrity. B) opportunities for defalcation. C) protection against embezzlement. D) audit trail support.

62) All executive compensation must be: A) maintained in a file and purged annually. B) available for inspection by any interested party. C) annotated as to derivation and benchmarks. D) reported with the company's financial statements.

63) Individuals classified as ________ are paid as vendors of a firm. A) exempt employees B) nonexempt employees C) government contract employees D) independent contractors

64) ________ payroll is processed twice per month and will usually result in a higher gross pay

per pay period than ________ payroll. A) Weekly; monthly B) Semimonthly; biweekly C) Biweekly; semimonthly D) Daily; biweekly

65) Form I-9 is issued by the ________ to verify employment eligibility in the United States. A) Internal Revenue Service B) Department of Homeland Security C) Federal Bureau of Investigation D) Department of Labor

66) Personnel in certain full-time occupations such as life insurance sales are classified as

________ instead of independent contractors. A) contract employees B) executive workers C) statutory employees D) non-statutory workers

67) FATCA enforcement has been difficult because the Internal Revenue Service relies on

________ for reporting purposes. A) intermediaries (e.g., banks) B) employers and employees C) foreign countries D) personal income tax returns

68) ________ pay is based on manufacturing revenue, while ________ pay is based on sales

revenue. A) Exempt; nonexempt B) Commission; overtime C) Piece-rate; commission D) Commission; piece-rate

69) Verification of hours worked and pay accuracy is part of the ________. A) disbursement cycle B) accounts payable reconciliation C) CEO's responsibility D) payroll review process

70) IRS Regulation 26 CFR 1.6001 mandates ________ procedures as they pertain to payroll

records, noting that it is the responsibility of the ________. A) file maintenance; employer B) payroll review; payroll supervisor C) check authorization; controller D) employee time review; department manager

71) Upon termination from a firm, the employer must disburse the former employee's final pay

________. A) immediately B) within 24 hours C) at the next scheduled payday D) in accordance with state law

72) Payroll records that pertain to employees who have committed fraud or other illegal actions

must be ________. A) retained for two years B) destroyed immediately C) retained indefinitely D) released to law enforcement officials

73) What is the difference in pay practices between salaried exempt and salaried nonexempt

workers? A) Salaried exempt workers may only work eight hours per day. B) Salaried nonexempt workers must not work overtime hours. C) Salaried exempt workers must work between 45 and 50 hours per week. D) Salaried nonexempt workers may be eligible for overtime pay.

74) Rio is a salaried exempt worker whose standard workday consists of eight-hour shifts.

During a workweek, Rio exceeded eight hours of work on two separate days but did not exceed 40 hours during the work week. What is the FLSA provision for the time worked past eight hours in a single day? A) He must be compensated at overtime rates for any hours past eight in a single day. B) He must reduce the time he works on subsequent days to avoid overtime pay. C) He must alert his manager of the extra time on the next business day. D) No specific FLSA provision exists for work completed in excess of eight hours in a 24-hour period.

75) According to the Fair Labor Standards Act, nonexempt workers receive overtime for: A) hours worked in excess of 8 per day and 30 per week. B) hours worked in excess of 40 per week. C) hours worked in excess of 9 per day or 35 per week. D) hours worked in excess of employer-determined rules.

76) Orion is a nonexempt employee who works for a firm that has an elected workweek

composed of four 10-hour days and pays overtime after 40 hours worked per week. What is the rule about overtime for the work situation? A) Orion must be compensated for all hours worked past 8 in a single day. B) Orion will receive overtime pay when working more than 10 hours during a shift. C) Orion receives overtime only when she works past 40 hours in any given week. D) Orion is not eligible for overtime pay.

77) Which of the following is an example of an exempt salaried employee? A) Machine Operator B) Accounting Clerk C) Administrative Assistant D) Controller

78) A ________ employee is not eligible for company benefits whereas a ________ employee is

eligible. A) independent contractor; temporary B) temporary; part-time C) leased; temporary D) temporary; leased

79) The IRS stipulates that no more than ________ percent of a company’s employees may be

leased employees. A) 10 B) 20 C) 30 D) 40

80) Leased employees may not have the following characteristic: A) they must work full-time. B) they must work part-time. C) the recipient company must substantially direct their work activities. D) a formal agreement between the employee and employer must exist.

81) Regulation ________ mandated disclosure of paycard-related information and fees to

employees. A) E B) H C) P D) Z

82) Which of the following is true about independent contractors within the context of payroll? A) B) C) D)

They are employees of the company. A temporary working relationship must exist. Tools and facilities are provided by the employer. The worker controls hours worked and exercises judgment.

Answer Key Test name: Chapter 2 1) TRUE 2) FALSE 3) FALSE 4) FALSE 5) TRUE 6) TRUE 7) FALSE 8) TRUE 9) TRUE 10) TRUE 11) A 12) A 13) B 14) A 15) D 16) C 17) D 18) B 19) B 20) A 21) A 22) C 23) C 24) A 25) D 26) B 27) C 28) A 29) D 30) D 31) D 32) C 33) B 34) B 35) C 36) C 37) A

38) B 39) A 40) A 41) D 42) B 43) A 44) C 45) B 46) C 47) B 48) D 49) C 50) B 51) D 52) D 53) A 54) B 55) B 56) C 57) A 58) A 59) C 60) D 61) B 62) C 63) D 64) B 65) B 66) C 67) A 68) C 69) D 70) A 71) D 72) C 73) D 74) D 75) B 76) C 77) D

78) D 79) B 80) B 81) D 82) D

Chapter 3:__________ 1) Net pay is the amount of employee compensation prior to deducting any amounts for taxes or

other withholdings. ⊚ true ⊚ false

2) Salaried employees may be classified as nonexempt. ⊚ true ⊚ false

3) A firm is exempt from FLSA provisions if it engages in interstate commerce. ⊚ true ⊚ false

4) The tipped minimum wage is the same as the federal minimum wage for all states. ⊚ true ⊚ false

5) Federal policy clearly explains which employees qualify for exempt status. ⊚ true ⊚ false

6) To compute the hourly rate for an employee with a 35-hour standard workweek, you would

divide the annual salary by 1,820. ⊚ true ⊚ false

7) Commission-based pay is used for employees who participate materially in the sale of

manufacturing components. ⊚ true ⊚ false