Payroll Accounting - Final Exam
Payroll Accounting Mastery Quiz
Test your knowledge on payroll accounting and labor laws with this comprehensive final exam quiz. Designed for individuals and professionals seeking to reinforce their understanding, this quiz covers essential topics including wage policies, employee rights, and tax regulations.
By participating, you will:
- Enhance your understanding of payroll processes
- Learn about federal and state labor laws
- Prepare for possible certification exams in accounting
Which law establishes the minimum wage?
Fair Labor Standards Act
Federal Income Tax Act
Federal Insurance Contributions Act
Federal Unemployment Tax Act
The Fair Labor Standards Act is commonly known as the Federal Wage and Hour Law.
True
False
All states have set their minimum wage to be the same as the federal government.
True
False
By the use of executive orders, the federal government has banned discrimination in employment on government contracts.
True
False
Each state imposes an income tax on employees that is 2% of gross wages.
True
False
What is the current federal minimum wage?
$10.00
$7.25
$7.75
$8.50
Title VII of the Civil Rights Act is also referred to as which of the following?
Wage and Hour Act
Social Security Act
Age Discrimination Act
Equal Employment Opportunity Act
Which information is included on Form I-9, a form completed by each employee?
Contributions to individual retirement accounts
Verification of employment eligibility
Eligibility for unemployment benefits
Eligibility for Medicare benefits
What information does the E-Verify program check against existing Social Security information?
Age of new hires
Vesting status of all employees
Health status of employees on medical leave
Employment eligibility of new hires
What is the definition of an applicable larger employer according to the Affordable Care Act?
15 or more full-time employees during the previous year
1 or more full-time employees during the previous year
200 or more full-time employees during the previous year
50 or more full-time employees during the previous year
Domestics, which includes cooks, butlers and caretakers, are excluded from coverage under the FLSA individual employee coverage.
True
False
Employees paid biweekly receive earnings every two weeks.
True
False
The FLSA requires that workers receive overtime pay for all hours worked in excess of 40 in a workweek.
True
False
One of the tests to be met for the white-collar exemption for an executive is to be paid a salary of at least $1,000 per week.
True
False
Under enterprise coverage, all employees of a business are covered by the Fair Labor Standards Act if the organization is which of the following?
A nursing home
A public agency
A hospital
All of the above
Which workers are exempt from all Fair Labor Standards Act requirements?
Clerk-typists earning less than $200 a week
Taxicab drivers
Motion picture theater employees
None of the above
Which of the following is true according to the Equal Pay Act?
Employers must pay a married male a higher wage rate than a single female if both are performing equal work
White-collar workers are exempt from its requirements
Wage differentials based on a seniority system are allowed
If there is an unlawful pay differential, employers may reduce the higher rate to equal the lower rate
Which of the following is true according to FLSA?
Employers use time cards to record the employees' time worked
Employers use the continental time system to record all time worked by employees
Employers keep records that show the hours each employee worked each workday and each workweek
Employees sign each clock card
If an employee works two jobs at two different wage rates for the same employer during the same pay week, any overtime pay must be calculated by using what overtime hourly rate?
One and one-half the higher of the two wage rates
One and one-half the lower of the two wage rates
One-half of the higher of the two wage rates
None of the above
When is overtime pay required under FLSA?
Any hours worked in excess of 8 in one day
All work on Sunday
All hours worked in excess of 40 in a workweek
All hours worked on Christmas
The highest paid executives of a firm are excluded from coverage under the Federal Insurance Contributions Act (FICA).
True
False
Severance pay is considered taxable under FICA.
True
False
Under FICA, only cash tips of more than $100 in a month are defined as taxable wages.
True
False
Form 941 is used by employers to make their quarterly return of FICA taxes and withheld income taxes.
True
False
Which is not considered a wage according to FICA?
Year-end bonuses
Standby payments
Total cash tips of $15 received by a tipped employee in May
Employees' Social Security taxes paid for by the employer
How is the OASDI taxable wage base defined?
All amounts earned by an employee during a calendar year
The maximum amount of wages paid during a calendar year that is subject to the OASDI tax
All amounts paid to an employee during a calendar year
All amounts either earned by or paid to an employee during a calendar year
For which kind of employment does FICA include coverage?
Domestic service performed in a college sorority by a student
Service performed by a 16-year-old child in the employ of the mother
Babysitting service performed by a 35-year-old person who receives $40 in cash during the calendar quarter
Federal government secretaries hired in 1990
Which payments are not taxable for FICA?
Back pay awards
Wage supplements to cover difference between employees' salaries and their military pay
Severance pay
Difference between employees' regular wages and the amount received for jury duty
Under FICA, which of the following definitions describes an employee in an employee employer relationship?
A person who provides a service as an independent trade or business
1099 employee
Employs workers
Individual who performs services in a covered employment
What does the abbreviation SECA stand for?
Self-Employment Contributions Act
Self-Employed Contributions Act
Self-Established Contributions Act
Self-Entertainment Contributions Act
The amount of federal income taxes to be withheld is determined after subtracting from the employee’s gross wages and state taxes.
True
False
All taxable, non-cash fringe benefits received during the year can only be added to an employee’s taxable pay on the last payday of the year.
True
False
For state income tax purposes, all states treat 401(k) plan payroll deductions as nontaxable.
True
False
Under the federal income tax withholding law, which worker is not an employee?
Partner who draws compensation for services rendered for the partnership
General manager, age 66
Payroll clerk hired one week ago
Governor of the state of Florida
For which payments is an employer required to withhold federal income taxes?
Advances made to sales personnel for traveling expenses
Tipped employee's monthly tips of $120
Deceased person's wages paid to the estate
Memberships in social or country clubs
Which non-cash fringe benefit is not subject to federal income tax withholding?
Personal use of company car
Sick pay
Employer-paid membership to a country club
All of the above are taxable
Which cannot be included in a cafeteria plan?
Group-term life insurance (first $50,000 of coverage)
Dependent care assistance (first $5,000)
Self-insured medical reimbursement plan
Educational assistance
Which is not a wage subject to federal income tax withholding?
Kitchen appliances given by manufacturer in lieu of cash wages
Dismissal payment
Vacation pay
Payments made under workers' compensation law
Which statement correctly describes the withholding of federal income taxes and Social Security taxes on tips?
Tips amounting to $10 or more in a calendar month must be reported by tipped employees to their employers.
The withholding of federal income taxes on employees' reported tip income is made from the amount of tips reported by employees.
Taxes on the net earnings of the self-employed. When employees report taxable tips in connection with employment in which they also receive regular wages, the amount of tax to be withheld on the tips is computed as if the tips were a supplemental wage payment.
Employers do not withhold FICA taxes on the tipped employees' reported tip income
Insurance agents paid solely on a commission basis are not considered employees under FUTA.
True
False
If an employee works in more than one state, the employer must pay a separate SUTA tax to each state in which an employee earns wages.
True
False
FUTA and SUTA coverages extend to U.S. Citizens working abroad for American employers.
True
False
Retirement pay is taxable wages for FUTA purposes.
True
False
What is the quarterly tax liability threshold for FUTA?
$3,000
$500
$1,000
$1
Which payments are taxable payments for federal unemployment tax?
Christmas gifts, excluding noncash gifts of nominal value
Caddie fees
Courtesy discounts to employees and their families
Workers' compensation payments
When making FUTA payment, the employer must make the deposit by what time?
End of the month after the quarter
15th of every month
10th of the month after the quarter
End of the following quarter
If an employer has made timely deposits that pay the FUTA tax liability in full, the filing of Form 940 can be delayed until:
December 31
October 15
February 10
March 31
Which is not a factor considered in determining coverage of interstate employees?
Location of base of operations
Place where work is localized
Location of company's payroll department
Location of employee's residence
What position is included under the definition of employees for FUTA purposes?
Independent contractors
Insurance agents paid solely on commission
Student nurses
Corporate Officer, such as CEO and CFO
All taxable, non-cash fringe benefits received during the year can only be added to the employees' taxable pay on the last payday of the year.
True
False
If an employee works in more than one state, the employer must pay a separate SUTA tax to each state in which an employee earns wages.
True
False
By the use of executive orders, the federal government has banned discrimination in employment on government contracts.
True
False
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