Deck 2: Computing Wages and Salaries

Question 1

Which pay frequency has generally 26 pay periods per year?
• Bimonthly
• Semimonthly
• Semi-weekly
• Biweekly

Answer 1

Biweekly

Question 2

Why must pay period information be a part of an employee's payroll file?
• To document satisfaction of court-ordered obligations.
• As a means of ensuring pay equality among employees.
• To ensure that the employee receives all compensation earned.
• As a means of tracking time worked for overtime compensation purposes.

Answer 2

As a means of tracking time worked for overtime compensation purposes.

Question 3

Why is it important for an employer to classify a worker as either an employee or an independent contractor?
• For reimbursement purposes
• For child support obligations purposes
• For government tracking purposes
• For tax reporting purposes

Answer 3

For tax reporting purposes

Question 4

Semimonthly payroll involves a pay cycle in which pay disbursements occur every two weeks.

Question 5

If a firm pays its employees biweekly, how often does it disburse employee compensation?
• Every two weeks
• Twice per week
• Every three weeks
• Every week

Question 6

Ibrahim is the payroll accountant for a firm. He notes that the firm has hired a new employee. What forms must he collect from the new employee?
• W-4 and I-8
• W-4 and I-9
• W-2 and I-9
• W-3 and I-9

Question 7

Foreign workers in the United States are subject to new hire reporting regulations.

Question 8

Which pay frequency has 24 pay periods annually?
• Semi-weekly
• Weekly
• Semimonthly
• Biweekly

Question 9

The two focuses of payroll procedures are company needs and governmental rules.

Question 10

S. workers in foreign subsidiaries are exempt from all income taxes.

Question 11

It is considered a best practice to assign one employee for all payroll duties.

Question 12

What forms are required when an employee is hired? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• SS-4
• I-9
• W-2
• W-4

Question 13

A worker who sells life insurance on a full-time basis is considered a statutory employee.

Question 14

Pay rate is the first payroll system decision a company must make.

Question 15

Employers may choose to omit the employees' Social Security numbers in their employee files.

Question 16

Which of the following is/are purpose(s) of new hire reporting laws? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• To keep track of workers and professionals who are subject to licensing regulations.
• To ensure payment of court-ordered obligations like garnishments and child support.
• To keep track of workers throughout their careers.
• To ensure that the employee may legally work in the United States.

Question 17

Newly hired employees must be reported to governmental officials within 20 days of starting work for an employer.

Question 18

Which pay frequency has 12 pay periods?
• Daily
• Monthly
• Semimonthly
• Weekly

Question 19

Only regular working hours are considered as the worked hours for overtime computation.

Question 20

Which of the following items must exist in every employee's payroll file?
• Spouse's birth date
• Spouse's social security number
• Employment history
• Occupation

Question 21

For payroll documentation purposes, when an employee needs time away from work:
• The request should be documented and forwarded to the payroll clerk.
• Upper management must approve the request.
• The supervisor should authorize it verbally.
• The employee should email only department colleagues.

Question 22

Which of the following is subject to overtime in the process of hourly computations, according to
FLSA?
• Time worked in excess of 40 hours per week
• Nonexempt employee weekend work
• Holiday, sick time, and paid time off
• Time worked in excess of eight hours per day

Question 23

Which of the following is a purpose of new hire reporting? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• Communications of ethics violations for clerical workers
• COBRA benefits administration
• Child support obligations tracking
• Immigration agency tracking

Question 24

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

Question 25

Which entity bears the responsibility for gaining approval for a foreign worker visa so a foreign employee may work legally in the United States?
• The U.S. State Department
• The employer
• The employee
• The employer's home country

Question 26

An employer must have an employee complete Form W-4:
• Each year, upon the employee's anniversary with the firm.
• Every January 1.
• At the time of hire.
• Before each pay disbursement.

Question 27

Which of the following factors assist employers in determining employee pay rates? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• Company location
• Industry benchmarks
• Employee age
• Employee skill

Question 28

Josh, who is 21 years of age, is a new employee of XYZ Company. To establish his identity and employment authorization, he could present:
• His library card and birth certificate.
• His current United States passport.
• His driver's license and ATM card.
• His college transcript and driver's license.

Question 29

Which of the following is a necessary element in an accounting system? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• Audit review
• Internal control
• Internal review
• Audit control

Question 30

When a payroll clerk receives an approved request for an employee's time away from work, he or she should:
• Destroy the document in accordance with privacy laws.
• Immediately place it in the employee's file.
• Contact the employee to verify the request.
• Attach it to the employee's time collection report for the pay period.

Question 31

Georgeanne works in a company for which her primary job function is the sale of company products to consumers. She receives a percentage of each sale as part of her compensation. Her compensation contains a element.
• pay-for-performance
• nonexempt
• commission
• piece-rate

Question 32

A company should restrict access to payroll files (paper and/or electronic) as a part of .
• FATCA requirements
• audit trail requirements
• compliance with company policy
• file security internal controls

Question 33

Which of the following is a potential consequence of incorrect calculation of employee time for payroll purposes? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• Federal penalties for not remitting all taxes due.
• Erosion of available cash because of overpayments to employees.
• An increase in legal proceedings initiated by employees.
• Increased stakeholder approval due to employee overpayments.

Question 34

Allen is an employee of the foreign subsidiary of a United States based company who lives and works in the United Kingdom. According to FATCA, how much of his wages may Allen exclude from United States' taxes, according to 2019 guidelines?
• $46,500
• $79,850
• $105,900
• None

Question 35

Stan works for a bakery for which part of his compensation is based on the decoration of wedding and other specialty cakes. His compensation has a element.
• nonexempt
• commission
• piece-rate
• performance incentive

Question 36

A company should assign employee(s) the responsibility for signing payroll checks and disbursements.
• a limited number of
• only one
• its most responsible
• none of these

Question 37

The mandated that new hires must be reported within days to state authorities.
• Fair Labor Standards Act; 30
• Immigration Reform and Control Act; 20
• Davis-Bacon Act; 28
• Civil Rights Act; 25

Question 38

Multistate employers must do which of the following for new hire reporting? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• File a new-hire report with both the state that contains the firm's headquarters and the state that is the employee's primary residence.
• File a report with the state offices for the employee's state of residence.
• Designate which state will receive their new hire reporting.
• File a report with the IRS since they have employees in multiple states.

Question 39

Outsourcing the payroll process:
• Relieves the company of certain task completion but not the review process.
• Relieves the company of the review process but not the task completion.
• Relieves the company of all liability for payroll completion and accuracy.
• Relieves the company of the task completion and the review process.

Question 40

Abigail is a full-time worker whose primary occupation involves extensive overnight travel to visit wholesaler sites on the behalf of a single company. Which of the following classifications most accurately describes Abigail's employment status?
• Nonexempt employee
• Independent contractor
• Statutory employee
• Exempt employee

Question 41

A firm needs to destroy paper payroll records after the end of the retention period. Which of the following is an option for destruction purposes? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• Shredding
• Pulping
• Burning
• Discarding

Question 42

Employee file maintenance is the responsibility of the:
• State government.
• Payroll vendor.
• Employee.
• Employer.

Question 43

What types of records does IRS Regulation 26 CFR 1.6001 cover? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• Manual pay records
• Outsourced payroll records
• Independent contractor remittance
• Computerized pay records

Question 44

Natalie is involuntarily terminated by a company in Alabama. According to state regulations, when must she receive her final pay?
• On the next business day
• At the next schedule payday
• No standardized state guidelines exist
• Within seven business days

Question 45

Max Johnson was terminated from a company in South Carolina because of a reduction in workforce. Which statement best describes the state's requirements for disbursement of his final pay?
• At the next scheduled pay date.
• On the next business day.
• Within two weeks.
• Within 48 hours.

Question 46

Geoff is the payroll clerk for a firm that maintains its payroll through computerized records on a centralized server. One of his 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 Geoff follow?
• He should purge the record from the server.
• None. His method is acceptable.
• He should check all other employees' computers to ensure that the record is deleted.
• He should send an interoffice request to have someone in the information technology department remove the record from the server.

Question 47

What is the difference between termination and resignation, as far as final pay is concerned?
• Resignation pay must be paid within one week and termination pay must be the next business day.
• Resignation pay may be paid at the next regular pay date, but termination pay is subject to state law.
• Resignation and termination pay are subject to state regulations.
• Resignation pay must be paid on the next business day and termination pay is due immediately.

Question 48

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

Question 49

Which of the following parties does not legally have access to a firm's payroll records?• The IRS
• The Department of Homeland Security
• State revenue department employees
• All employees of the firm

Question 50

payroll is processed every two weeks and will usually result in a lower gross pay per pay period than payroll.
• Biweekly; semimonthly
• Daily; biweekly
• Weekly; monthly
• Semimonthly; biweekly

Question 51

All executive compensation must be:
• Annotated as to derivation and benchmarks from similar companies.
• Reported with the company's financial statements.
• Maintained in a file and purged annually.
• Available for inspection by any interested party.

Question 52

When developing the internal controls and record retention for a payroll system, a company should:
• Designate a single employee with the responsibility for pay disbursements.
• Involve all company employees to promote transparency.
• Train accounting personnel on a single payroll task.
• Develop a closed system and alternate employee duties.

Question 53

Upon termination, which of the following must be included in an employee's final pay?
• Hours worked.
• Sick time accrued but not used.
• Severance pay.
• Vacation previously paid.

Question 54

A payroll accountant is preparing the final pay for a commission-based salesperson who has been terminated from the firm. What will happen to the salesperson's commissions that have been earned but not paid?
• The employee must receive final non-commission pay immediately, but any commission pay will be delayed.
• The final pay must include all commissions earned, in accordance with any pay agreement.
• The salesperson's final pay is delayed to allow for computation of commissions.
• The salesperson must receive termination pay immediately and forfeits all unpaid commissions.

Question 55

Individuals classified as are processed as vendors of a firm.
• government contract employees
• independent contractors
• exempt employees
• nonexempt employees

Question 56

Mako was an employee of the Jaeger Corporation. After she voluntarily terminated employment, auditors discovered evidence of fraudulent activity that they traced to her. Mako's records must be retained:
• For 10 years.
• Indefinitely.
• For 15 years.
• For 20 years.

Question 57

Which of the following is true about document retention requirements per the IRS statute of limitations?
• Federal legislation requires documents to be retained for two years after the employee's termination.
• Payroll records must be maintained for three years after termination.
• Union employees' records must be retained for five years after termination.
• State legislation requires records to be retained for a minimum of eight years after termination.

Question 58

Well-designed internal controls promote: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• Audit trail support.
• Protection against embezzlement.
• Legal compliance and file integrity.
• Opportunities for defalcation.

Question 59

The retention period for payroll documents commences:
• When an employee's first pay is disbursed.
• When an employee terminates employment.
• At the time an employee is hired.
• Once the employee completes one year of service.

Question 60

Computerized payroll records are considered a(n):
• Closed access.
• Open system.
• Open access.
• Closed system.

Question 61

Adrienne 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 her work situation?
• She must be compensated for all hours worked past 8 in a single day.
• She will receive overtime pay when working more than 10 hours during a shift.
• She is not eligible for overtime pay.
• She receives overtime only when she works past 40 hours in any given week.

Question 62

Jeremiah is a salaried exempt worker whose standard workday consists of eight-hour shifts. During a workweek, he 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 that he worked past eight hours in a single day?
• He will receive no additional compensation for the extra time worked.
• He must alert his manager of the extra time on the next business day.
• He must be compensated at overtime rates for any hours past eight in a single day.
• He must reduce the time he works on subsequent days.

Question 63

Form I-9 is issued by the to verify employment eligibility in the United States.
• Internal Revenue Service
• Department of Homeland Security
• Federal Bureau of Investigation
• Department of Labor

Question 64

Which of the following is an example of a typical exempt salaried employee?
• Operations Manager.
• Machine Operator.
• Accounting Clerk.
• Administrative Assistant.

Question 65

What is the difference in pay practices between salaried exempt and salaried nonexempt workers?
• Salaried nonexempt workers must not work overtime hours.
• Salaried nonexempt workers are eligible for overtime pay.
• Salaried exempt workers must work between 45 and 50 hours per week.
• Salaried exempt workers may only work eight hours per day.

Question 66

Payroll records that contain evidence of fraud or other illegal action must be .
• retained for two years
• destroyed immediately
• retained indefinitely
• released to law enforcement officials

Question 67

Leased employees must have the following characteristics: (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer. Any boxes left with a question mark will be automatically graded as incorrect.)
• The recipient company must substantially direct their work activities.
• They must work part-time.
• A formal agreement between the employee and employer must exist.
• They must work full-time.

Question 68

According to the Fair Labor Standards Act, nonexempt workers receive overtime for:
• Hours worked in excess of 8 per day and 30 per week.
• Hours worked in excess of 40 per week.
• Hours worked in excess of employer-determined rules.
• Hours worked in excess of 9 per day or 35 per week.

Question 69

FATCA enforcement has been difficult because the Internal Revenue Service relies on for reporting purposes.
• personal income tax returns
• employers and employees
• intermediaries (e.g., banks)
• foreign countries

Question 70

A employee is eligible for company benefits whereas a employee is not.
• independent contractor; temporary
• temporary; part-time
• leased; temporary
• temporary; leased

Question 71

IRS Regulation 26 CFR 1.6001 mandates procedures as they pertain to payroll records, noting that it is the responsibility of the .
• employee time review; department manager
• file maintenance; employer
• payroll review; payroll supervisor
• check authorization; controller

Question 72

pay is based on sales revenue, while pay is based on manufacturing.
• Exempt; nonexempt
• Piece-rate; commission
• Commission; overtime
• Commission; piece-rate

Question 73

Personnel in certain full-time occupations are classified as instead of independent contractors.
• statutory employees
• executive workers
• contract employees
• non-statutory workers

Question 74

Upon termination from a firm, the employer must disburse the former employee's final pay
.
• in accordance with state law
• immediately
• within 24 hours
• at the next scheduled payday

Question 75

Verification of hours worked and pay accuracy is part of the .
• accounts payable reconciliation
• payroll review process
• disbursement cycle
• CEO's responsibility

Question 76

The IRS stipulates that no more than percent of a company's employees may be leased employees.
• 10
• 20
• 30
• 40