Chap 2 Terms

Question 1

Biweekly Payroll

Answer 1

pay frequency in which employees are paid 26 times per year

Question 2

Commission

Answer 2

employee compensation aid upon completion of a task, often pertaining to sales-based activities.

Question 3

Daily Payroll

Answer 3

pay frequency in which employees are paid each business day.

Question 4

Document Destruction

Answer 4

act of destroying documents that contain sensitive payroll and employee information.

Question 5

Exempt

Answer 5

an employee who is not subject to the overtime provisions of the Fair Labor Standards Act

Question 6

File Maintenance

Answer 6

the application of all transactions, including any necessary modification, to an employee’s file.

Question 7

File Security

Answer 7

the procession of sensitive payroll information by restricting access and securely storing files.

Question 8

Foreign Account Tax Compliance Act (FATCA)

Answer 8

Federal law that regulates the income tax withholdings of foreign employees.

Question 9

Hiring Packet

Answer 9

a packet of forms that a firm issues to new employees; examples are Form W-4, Form I-9 and health insurance enrollment.

Question 10

I-9

Answer 10

the Employment Eligibility Verification

Question 11

Internal Control

Answer 11

a firm’s process of maintaining efficiency and effectiveness, work quality, accurate and reliable financial reports, and legal compliance.

Question 12

Leased Employee

Answer 12

a person who provides services for a company subject to the provisions of IRS code section 414(n)

Question 13

Monthly Payroll

Answer 13

pay frequency in which employees are paid 12 times per year.

Question 14

New Hire Reporting

Answer 14

a process by which a firm notifies governmental authorities of any new hires shortly after the hire date.

Question 15

Nonexempt

Answer 15

an employee who is subject to all overtime provisions of the Fair Labor Standards Act; generally, an hourly employee.

Question 16

Outsourced Vendor

Answer 16

a party external to a firm that provides goods or services.

Question 17

Pay Period

Answer 17

the recurring period during which a firm collects employee labor data and pays employees in accordance with wage or salary agreements.

Question 18

Paycard

Answer 18

a debt card, issued to employees, that contains electronically transmitted wages

Question 19

Payroll Audit

Answer 19

an examination of a firm’s payroll records to determine legal compliance.

Question 20

Payroll Register

Answer 20

the payroll accountants internal tool that helps ensure accuracy of employee compensation.

Question 21

Payroll Review

Answer 21

verification of payroll accuracy for a period.

Question 22

Piece Rate

Answer 22

employee compensation based on the production of unit or completion of an action during a specified time period.

Question 23

Resignation

Answer 23

voluntary termination of employment

Question 24

Review Process

Answer 24

examination and analysis of accounting records to ensure accuracy and completeness.

Question 25

Semimonthly Payroll

Answer 25

payroll frequency in which employees are paid 24 times per year.

Question 26

Separation of Duties

Answer 26

an internal control method in which payroll duties are spread among two or more employees.

Question 27

Statutory Employee

Answer 27

a special class of employees who run their own business but must be treated as employees for tax reasons.

Question 28

Tax Table

Answer 28

a set of recalculated tables issued by federal and state governments to facilitate income tax computations for employee payroll.

Question 29

Temporary Employee

Answer 29

a worker who is employed by a temporary staffing agency and works under the direction of the agency on a temporary basis for different companies.

Question 30

Termination

Answer 30

ceasing employment with a firm.

Question 31

W-4

Answer 31

Employee Withholding Allowance Certificate

Question 32

Weekly Payroll

Answer 32

payroll frequency in which employees are paid 52 times per year.