CPP Practice Exam Flashcards
Company deadlines for payroll data input documents are essential for:
A. Timely processing of the payroll
B. Accurate entry of data
C. Guaranteeing that all information is processed
D. Adequate auditing purposes
A. Timely processing of the payroll
Which of the following features is least likely to be considered when looking at the security of the new payroll system?
A. Regular data backup and storage
B. Protection against computer viruses
C. Limited system access
D. System edits
D. System edits
An employee earns $9 per hour and an additional 10 cents per hour for hours worked after 7pm. If an employee works from 2pm to 11pm with an unpaid meal break from 6pm to 7pm, Monday through Friday, what is the employee’s weekly gross pay under the fair labor standards act?
A. $360
B. $361
C. $362
D. $364
C. $362
The best reason for tracking pay related problem statistics is to enable payroll two:
A. Identify root causes and take actions to prevent similar recurrences
B. Apologize to clients in a more professional manner
C. Direct problems to those who caused the problem
D. Justify more resources to handle more problems
A. Identify root causes and take actions to prevent similar recurrences
With regard to employees’ reported tips, the employer must:
A. Withhold and pay only the employees’ portion of social security and Medicare taxes on tips
B. Report taxes on tips separately when making an employment tax deposit
C. Report tips as wages on Form W-2 and pay the employer portion of social security and Medicare taxes
D. Report and pay the employer portion of Social Security and Medicare taxes on the portion of cash tips above the federal minimum wage
C. Report tips as wages on Form W-2 and pay the employer portion of social security and Medicare taxes
Transactions are recorded in chronological order into books of original entry called:
A. Registers
B. Vouchers
C. Invoices
D. Journals
D. Journals
The KEY advantage to using an automated time and attendance system is that it:
A. Identifies phantom employees
B. Reduces errors
C. Interfaces with the payroll system
D. Frees supervisors from having to review hours
B. Reduces errors
As part of the implementation of a new payroll system, all transactions from the most recent actual payroll as processed in the new system prior to using the system to run payrolls. This is an example of what type of testing?
A. Compliance
B. Backup
C. Ongoing
D. Parallel
D. Parallel
To exhibit good customer service skills, payroll staff must understand and be able to explain:
A. Payroll forms
B. Benefits enrollment techniques
C. Systems design decisions
D. Strategic departmental direction
A. Payroll forms
Under the FLSA, what is the compensation due an employee whose rate of pay is $8 per hour and who is paid for 52 hours during a one-week period, including 8 hours of sick pay?
A. $416
B. $432
C. $448
D. $464
B. $432
All of the following data elements are required to be maintained in the employee masterfile except:
A. Social security number
B. Birth date
C. Marital status
D. Occupation
C. Marital status
Upward communication involves:
A. dissemination of management decisions to the staff
B. interactions between you and your manager
C. passing information to management
D. conducting quality circle meetings
C. passing information to management
The fact that transactions affect two separate accounts of a business is called:
A. compound-entry accounting
B. double-entry accounting
C. accrual accounting
D. T-accounting
B. double-entry accounting
A company pays all executives semimonthly. The FLSA requires all other employees to be paid on:
A. a weekly cycle
B. a biweekly cycle
C. a semimonthly cycle
D. any established cycle
D. any established cycle
Calculate the employee's gross pay under the FLSA based on the following data... Rate of pay per hour = $8 Production Bonus = $25 Shift differential per hour = $0.25 Total shift hours in a workweek = 44
A. $380.64
B. $377.00
C. $404.50
D. $405.64
D. $405.64
Which of the following answers BEST defines the term non-exempt under the FLSA?
A. a lower-paid class of employees
B. hourly-paid workers only
C. employees who must be paid overtime
D. a special class of employees as determined by the employer
C. employees who must be paid overtime
For how many years must the employer’s copy of Form 940 be retained?
A. 2
B. 3
C. 4
D. 5
C. 4
Copies of the production files and most recent payroll transactions are sent nightly to the parent company in a remote location. This practice is part of what type of plan?
A. security
B. control
C. disaster recovery
D. maintenance
C. disaster recovery
Employees who are not eligible for direct deposit and receive paychecks sent through the mail are constructively paid:
A. on the check date
B. when the checks were postmarked
C. when the checks were delivered
D. when the checks were cased
C. when the checks were delivered
Which of the following factors provides system security?
A. access level authorizations
B. shared passwords
C. conducting “physical payouts”
D. segregation of duties
A. access level authorizations
Under the FLSA, how long are employers required to keep records related to wages, hours, and conditions of employment?
A. 3 years
B. 4 years or until the file is no longer active
C. 7 years
D. permanently
A. 3 years
What is the payroll department manager responsible for in a company with strong internal controls?
A. assuring segregation of duties in the department
B. developing company policy
C. initiating payroll transactions
D. writing the internal audit transaction test plan
A. assuring segregation of duties in the department
The process of balancing multiple time sheets within a specified pay period utilizes a procedure known as:
A. batch totaling
B. exception reporting
C. system documentation
D. reconciliation
A. batch totaling
In 2014, an individual worked for three employers during the calendar year, earning $38,000, $39,000, and $45,000 respectively. What is the total amount of social security and Medicare taxes that should be withheld from the employer’s wages by the three employers?
A. $8,950.05
B. $6,893.00
C. $9,023.00
D. $9,333.00
D. $9,333.00
On what form must mistakenly paid wages, for which no repayment is made, be reported?
A. W-2
B. W-4
C. 1099-R
D. 1099-MISC
A. W-2
A report has been requested that is NOT a standard report fromt eh system. This type of report is a(n):
A. ad-hoc report
B. integrated report
C. batch system report
D. edit report
A. ad-hoc report
A procedure to have a time record signed by an employee indicates:
A. authorization for payment
B. confirmation of total hours
C. hours cannot be challenged
D. time spent at the establishment
B. confirmation of total hours
For an employee earning $10.20 per hour and participating in a 401(k) plan with a deferral per pay period of $50, compute the federal income taxable wages based on the following: Biweekly pay period Regular 80 hours 4 hours overtime 3 hours doubletime
A. $731.40
B. $888.40
C. $898.60
D. $938.40
B. $888.40
Which of the following statements is CORRECT regarding a federal tax levy?
A. it does not have to be honored if any other garnishments have been served.
B. it requires a new order for each pay period
C. it is limited only by the amount of the employee’s net pay
D. it is continued each pay period until a release of levy is received
D. it is continued each pay period until a release of levy is received
Penalties for failure to make timely deposits are determined by:
A. a flat rate of 10% for late payments
B. 5% of the undeposited amount with a maximum of $100,000
C. 15% of the undeposited amount with a maximum of $100,000
D. a four-tiered penalty structure based on the number of days the deposit is late
D. a four-tiered penalty structure based on the number of days the deposit is late
An employer may exclude a business expense reimbursement from income when the employee’s expenses meet which of the following requirements?
A. reimbursements are made with regular payroll
B. expenses are substantiated and excess advances are returned timely
C. expenses are business-related, substantiated, and excess advances are retained for future travel
D. expenses are business-related, substantiated, and excess advances are returned timely
D. expenses are business-related, substantiated, and excess advances are returned timely
Under the FLSA, a workweek is defined as:
A. any 7 consecutive 24-hour periods
B. Sunday through Saturday
C. a minimum of a 40-hour/5-day time frame
D. stated in a collective bargaining agreement
A. any 7 consecutive 24-hour periods
At least how often must employers report noncash fringe benefits as income for federal tax withholding purposes?
A. each pay period
B. monthly
C. quarterly
D. annually
D. annually
Certain company records must be retained for four years to comply with regulations of which of the following agencies?
A. USCIS
B. IRS
C. SSA
D. Wage and Hour Division, Department of Labor
B. IRS
To build morale and motivate staff, a manager must:
A. give good reviews and raises
B. reward “stars” and promote competition within each team
C. delegate accountability to staff members
D. be sincere and specific with praise
D. be sincere and specific with praise
From which of the following taxes are statutory workers’ compensation payments exempt?
A. federal income tax only
B. social security and Medicare taxes only
C. federal unemployment tax only
D. federal income, social security, Medicare, and federal unemployment taxes
D. federal income, social security, Medicare, and federal unemployment taxes
Which of the following items represents an input interface to the payroll system?
A. general ledger
B. time and attendance
C. benefit payments
D. material usage records
B. time and attendance
A company has a gross payroll of $120,589.36 that is taxable for federal income, social security, and Medicare taxes. Federal income tax withheld is $24,117.87; combined social security and medicare taxes withheld are $9,225.09. What is the company’s total payroll tax liability for this pay period?
A. $33,342.96
B. $42,568.05
C. $40,156.26
D. $66,685.92
B. $42,568.05
One reason many companies use a Zero Balance Checking Account is that:
A. cash is available for investment until items are presented for payment at the company’s bank
B. funds do not have to be deposited until the employee cashes the check
C. the company receives interest on the account
D. bank reconciliations are not required
A. cash is available for investment until items are presented for payment at the company’s bank
In a customer service situation, payroll should:
A. assure the caller everything is okay, even when it is not
B. get in the last word
C. avoid addressing stressful issues
D. remain assertive and stay focued
D. remain assertive and stay focued
All of the following items qualify as a de minimis fringe benefit EXCEPT:
A. occasional parties and picnics for employees
B. occasional supper money for working overtime
C. traditional holiday gifts, such as food items
D. group legal services worth less than $70 annually
D. group legal services worth less than $70 annually
All of the following steps are required when initiating direct deposit for an employee EXCEPT:
A. prenotification
B. receiving financial institution routing number
C. getting authorization from the employee
D. receiving employee’s bank account number
A. prenotification
When paying supplemental wages along with regular wages WITHOUT specifying the amount of each, how would a company determine the amount of income tax to withhold from the supplemental wages if the employee has been paid no supplemental wages so far during the year and the supplemental wage payment is no more than $1,000,000?
A. withhold a flat 25% from the supplemental wages and withhold from regular wages using the appropriate table
B. withhold a flat 25% from the supplemental wages
C. withhold income tax as if the total were a single wage payment for a regular payroll period
D. compute income tax withholding on the regular wages separate from the supplemental wages
C. withhold income tax as if the total were a single wage payment for a regular payroll period
An employer that deposits payroll taxes semiweekly incurs a tax liability of $55,000 on Tuesday and a liability of $110,000 on Wednesday. When must the taxes be deposited?
A. $55,000 on Thursday and $110,000 on Friday
B. $55,000 on Friday and $110,000 on the next Wednesday
C. $110,000 on Thursday and $55,000 on Friday
D. $165,000 on Thursday
C. $110,000 on Thursday and $55,000 on Friday
Documenting payroll policies and procedures will provide all of the following rules except:
A. a vehicle for improving processes
B. a tool for assessing internal business controls
C. a mechanism for educating payroll partners, suppliers, and customers
D. assurances of payroll personnel competency and performance
D. assurances of payroll personnel competency and performance
Which of the following records MUST be kept for four years?
A. hours worked
B. time cards
C. OSHA records
D. voided payroll checks
D. voided payroll checks
