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CPP EXAM TEST BANK | CERTIFIED PAYROLL
PROFESSIONAL EXAM | QUESTIONS AND
CORRECT ANSWERS | GRADED A+ | VERIFIED
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An employee claims married and two withholding allowances on her 2017 Form W-4, is paid $1,700 biweekly, and defers $50 per pay period to a 401(k) plan. Using the percentage method, what is the total of the biweekly deductions from the employee's pay for federal income, social security and Medicare taxes? A. $245. B. $252. C. $299. D. $114.96 ---------CORRECT ANSWER-----------------A. $245. FIT: $1,700 - $50 = $1,650 - (2 x $155.80) - $1,050 = $288.40 x 15% + $71.70 = $114. FICA: $1,700 x 7.65% = $130. $114.96 + $130.05 = $245. On a company's financial statements, payroll tax expense appears in the: A.Balance Sheet B. accrued payroll C. salaries expense D. income statement ---------CORRECT ANSWER-----------------D. income statement What is the chief advantage of a vendor payroll package> A. reduced processing time B. inexpensiveness and ease of installation C. no required major in-house system development D. lower cost than a service provider contract ---------CORRECT ANSWER- ----------------C. No required major in-house system development
Which of the following elements is essential to a disaster recovery plan? A. an excess supply of checks and direct deposit stubs B. a compatible off-site remote location to produce payrolls C. detailed documentation of current company policies D. a procedure for limiting security system access ---------CORRECT ANSWER-----------------B, A compatible off-site remote location to produce payrolls Which of the following practices is a strong internal control procedure? A. Have the payroll bank account reconciled in the payroll department B. Have the payroll manager distribute paychecks C. place payroll checks under the personal control of the payroll manager D. have a person other than the person who requested and authorized the payments prepare the payroll checks ---------CORRECT ANSWER------------ -----D. have a person other than the person who requested and authorized the payments prepare the payroll checks During 2017. an employee worked for company A and quit after earning $130,000. later in the same year the employee was hired by company B. With respect to social security, Medicare and FUTA, how should company B treat the employee's earnings as of the first wage payment? A. start accumulating social security, Medicare, and FUTA wages, and withhold both social security and Medicare taxes B. Start accumulating Medicare wages only and withhold medicare tax C. start accumulating social security, medicare and FUTA wages, but withhold medicare tax only D. Start accumulating medicare wages only, but withhold both social security and medicare taxes ---------CORRECT ANSWER-----------------A. start accumulating social security, Medicare, and FUTA wages, and withhold both social security and Medicare taxes
Which of the following plans describes a cafeteria plan under section 125 of the Internal Revenue code? A. a quantified and accountable expense reimbursement plan B. a tax-qualified retirement plan for public education institutions C. a plan which permits employees to select from two or more qualified taxable and nontaxable benefits D. a plan whereby state government employees may request that pretax dollars be set aside in a retirement account until age 59 ---------CORRECT ANSWER-----------------C. a plan which permits employees to select from two or more qualified taxable and nontaxable benefits Using federal child support guidelines, calculate the maximum amount of support that can be withheld from an employee's semimonthly disposable earnings of $1,500.00. The employee is four months in arrears in making child support payments and has no other dependents. A. $750. B. $825. C. $900. D. $975.00 ---------CORRECT ANSWER-----------------D. $975. ($1500x65%=$975) Employers in non-credit reduction states that pay their state unemployment taxes on time can deduct up to what percentage from the full FUTA tax rate in calculating their FUTA tax payments? A. 0.6% B. 4.5% C. 5.4% D. 6.0% ---------CORRECT ANSWER-----------------C. 5.4% Which of the following items determines the disposition of unclaimed wages? A. state law only B. federal law only C. federal and state law
D. no recognized procedures exist ---------CORRECT ANSWER----------------
- A. state law only An employee is terminated with 3 workdays remaining in a month. The employee earned an annual salary of $24,000 and was paid semimonthly. What is the regular compensation due this employee for the final pay period? A. $723. B. $782. C. $800. D. $869.57 ---------CORRECT ANSWER-----------------A. $723. ($24,000/24)-(($24,000/260)x3)=$723. Employee deferrals under section 401(k) are subject to which taxes? A. federal income, social security and Medicare taxes B. social security and Medicare taxes C. social security, Medicare and FUTA taxes D. federal income, social security, Medicare and FUTA taxes --------- CORRECT ANSWER-----------------C. social security, Medicare and FUTA taxes What does it mean if, at the end of an accounting period, a company has a debit balance in a liability account? A. The company has under deposited taxes withheld from employee wages B. The company has not yet paid the third party C. The company has withheld too much from the employee D. The company has paid to a third party more than was withheld from the employee ---------CORRECT ANSWER-----------------D. The company has paid to a third party more than was withheld from the employee All of the following factors are advantages of having an in-house developed payroll/HR system EXCEPT:
24 hours on the evening shift. Under the FLSA, what are the employee's gross wages for the week? A. $572. B. $522. C. $520. D. $546.00 ---------CORRECT ANSWER-----------------D. $546. (48x$10)+(24x$10x10%)=$504.0 0 $504.00/48=$10. ($504.00+($10.50x.50x8))=$546. Using the 2017 percentage method withholding tables, calculate the employee's withheld federal income tax based on the following data: Weekly pay frequency Vacation earnings: $360. Regular compensation: $239. 401(k) pre-tax deferral: $48. Married, 0 allowances A. $39. B. $21. C. $67. D. $47.15 ---------CORRECT ANSWER-----------------A. $39. $360.62+$239.38-$48.50=$551. $551.50-$525=($26.50x15%)+$35.90=$39. A request for proposal (RFP) can be used to: A. provide vendors with technical and functional system requirements B. request funds during a budget process C. analyze needs for the system D. assign programming resources to enhance functionality --------- CORRECT ANSWER-----------------A. provide vendors with technical and functional system requirements The Family and Medical Act requires employers to maintain records for at least:
A. 12 weeks B. 1 year C. 2 years D. 3 years ---------CORRECT ANSWER-----------------D. 3 years A nonexempt employee earns $400 per week for a normal schedule of 35 hours. Under the FLSA, how much would this employee be due if 48 hours were worked? A. $ B. $594. C. $548. D. $433.32 ---------CORRECT ANSWER-----------------B. $594. 400/35=$11. (48x$11.43)+($11.43x.5x8)=$594. How may federal income tax be withheld from separation pay and accrued vacation wages totaling $20,000 that are paid at the time of termination and identified separately on the employee's pay stub, if the employee has been paid $25,000 so far this year and had income tax and had income tax withheld from her most recent wage payment? A. using the aggregate method only B. using the prior 12 months' tax rate C. at the optional flat rate for all payouts at termination only D. at the optional flat rate or using the aggregate method ---------CORRECT ANSWER-----------------D. at the optional flat rate or using the aggregate method A payroll register for the pay period shows gross earnings of $300,000 and deductions of $120,000. The entry to the payroll expense account would be: A. $120, B. $180, C. $300, D. $420,000 ---------CORRECT ANSWER-----------------C. $300,
An employee earns $9 per hour and an additional 10 cents per hour for hours worked after 7:00 p.m. If an employee works from 2:00p.m. to 11:00p.m., with an unpaid meal break from 6:00 p.m. to 7:00p.m., Monday through Friday, what is the employee's weekly gross pay under the Fair Labor Standards Act? A. $ B. $ C. $ D. $364 ---------CORRECT ANSWER-----------------C. $ (40x$9)+(20x$.10)=$ The BEST reason for tracking pay-related problem statistics is to enable Payroll to: 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 ---------CORRECT ANSWER-----------------A. identify rout caused 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 --------- CORRECT ANSWER-----------------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 ---------CORRECT ANSWER-----------------D. journals The KEY advantage of 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 ---------CORRECT ANSWER-----------------B reduces errors As part of the implementation of a new payroll system, all transactions from the most recent actual payroll are 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. back-up C. ongoing D. parallel ---------CORRECT ANSWER-----------------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 ---------CORRECT ANSWER--------------- --A. payroll forms
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 ---------CORRECT ANSWER-----------------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. Total shift hours in workweek: 44 A. $380. B. $377. C. $404. D. $405.64 ---------CORRECT ANSWER-----------------D. $405. (44x$8)+(44x$.25)+$25= $ $388 / 44 = $8. $388 + ($8.82 x .5 x 4) = 17. $388 + $17.64 = $405. Which of the following answers BEST defines the term nonexempt 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 --------- CORRECT ANSWER-----------------C. employees who much 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 ---------CORRECT ANSWER-----------------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 ---------CORRECT ANSWER-----------------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 cashed ---------CORRECT ANSWER----------------- 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 ---------CORRECT ANSWER-----------------A. access level authorizations Under the FLSA, how long are employers required to keep records relating to wages, hours, and conditions of employment? A. 3 years B. 4 years or until the file is no longer active
C. 1099-R
D. 1099-MISC ---------CORRECT ANSWER-----------------A W- 2
A report has been requested that is NOT a standard report from the system. This type of report is called a(n): A. ad-hoc report B. integrated report C. batch system report D. edit report ---------CORRECT ANSWER-----------------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 establishement ---------CORRECT ANSWER-------------- ---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 double-time A. $731. B. $888. C. $898. D. $938.40 ---------CORRECT ANSWER-----------------B. $888. (80 x $10.20) + (4 x $10.20 x 1.5) + (3 x $10.20 x 2) - $50 = $888. 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 --------- CORRECT ANSWER-----------------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 deposits B. 5% of the undeposited amount with a maximum of $100, C. 15% of the undeposited amount with a maximum of $100, D. a four-tiered penalty structure based on the number of days the deposit is late ---------CORRECT ANSWER-----------------D. a four-tiered penalty structure based on the number of days the deposit is late An employer may exclude a business 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 ---------CORRECT ANSWER-----------------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 ---------CORRECT ANSWER-----------------A. any 7 consecutive 24 hour periods
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 ---------CORRECT ANSWER-----------------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. B. $42,568. C. $40,156. D. $66,685.92 ---------CORRECT ANSWER-----------------B $42,568. $24,117.87 + $9,225.09 + $9,225.09 = $42,568. 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 ---------CORRECT ANSWER--------- --------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 focused ---------CORRECT ANSWER------------- ----D. Remain assertive and stay focused Each of the following items qualifies 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 $100 annually ---------CORRECT ANSWER-----------------D. group legal services worth less than $ 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 ---------CORRECT ANSWER-----------------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 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 regular payroll period D. compute income tax withholding on the regular wages seperate from the supplemental wages ---------CORRECT ANSWER-----------------C. withhold income tax as if the total were a single wage payment for regular payroll period
