Payroll Test Answers
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Of the following, which is considered an
employer-paid benefit?
Slack days.
Sick days.
Random office supplies.
Fake days.
Which is listed under payroll taxes and costs?
Income
Medicare.
Debt
Rent
An employee works 40 hours at $15 per hour.
How much would their weekly pre-tax pay be?
$600
$480
$500
$700
What must all EIN applications disclose?
The true, legal owner of the business.
The products that the business sells.
The agreements that a business is in.
The amount of money the business makes.
Which employee tax elected filing status will
deduct the highest withholding amount?
Widowed 0
Single 0
Single 5
Divorced 2
Married 1
What three payroll taxes are employers
responsible for?
FICA, MUTA, SUNA
FICA, FUTA, PUMA
FICA, FUTA, SUPA
FICA, FUTA, SUTA
What specific criteria must be used when
making a voluntary deduction for meals?
It must be after work hours.
The meal must have been job-related.
It must be at work.
It must be during work hours.
Which form do you use to declare exemptions
and allowances?
W-4
WD-40
W-6
W-2
The combination of the Social Security tax and
the Medicare tax is referred to by what acronym?
SSMT
FICA
Which of the following do employees use to
report annual income tax returns?
I-9
W-2
W-4
I-95
What is the typical pay period?
Bi-weekly.
Semi-annually.
Bi-monthly.
Annually.
Which tax is unique to the states, California,
Hawaii, New Jersey, New York, and Rhode Island?
Extraordinarily low taxes.
No taxes.
Disability insurance tax.
Tea tax.
What does IRA stand for?
None of these
Interest Returns Account
Individual Retirement Account
Independent Revenue Account
What is an example of a voluntary deduction?
Luxury tax.
Income tax.
401(k)
Sales tax.
What does the initials EIC stands for?
Earned Interest Credit
Earnings Income Tax Credit
Earned Income Check
None of these answers are correct
Earned Income Credit
If you were to purchase stock, how is it
referred to in terms of payroll deductions?
It is completely ignored.
Investment plan.
Investing strategy.
Employee stock purchase plan.
Which tax form does an employee use?
W-5
W-2
W-8
W-1
Which of the following is considered a
withholding tax?
Payment tax.
Income tax.
Sales tax.
Inheritance tax.
Which tax form does a contractor use?
4531
1077
2055
1099
What is an Employer Identification Number for?
It identifies a businesses entity.
It does nothing.
It is the healthcare code.
It identifies transactions in a business.
What is the employers responsibility with
regard to Medicare taxes?
Nobody is responsible.
Employers are responsible for paying both the
employer and employee's portion of the Medicare tax.
Employers are only half responsible.
Employers are not responsible.
Which is an example of a required deduction?
Private taxes.
Preferred taxes.
State taxes
There are no required deductions.
An employee damages equipment and a court
orders their wages are withheld as repayment. This is known as:
garnishment
taxation
austerity
What is a pay period?
The period in time when businesses have to pay
their taxes.
The time when employees pay their taxes.
A recurring period of time that time is recorded
and paid.
The one time per year that employees are paid.
Which is not entitled to company benefits?
Employees with poor performance.
Managers.
Contractor
Employees.
When can voluntary deductions be made?
Only when the employee has agreed to them.
Never.
When the government requests it.
Any time.
Why is payroll important from an accounting
standpoint?
Payroll is entrusted with donating money.
Payroll and the taxes therein significantly impact
the success of the company.
Payroll is not important.
Payroll is important because it allocates funds to
those deemed worthy.
An employee has a HR status of 2080 annual
hours, what is their employment status?
Part Time
Commission
Seasonal
None of the answers are correct
Full Time
What is an employee?
A person who is not employed.
A person using a 1099 for for tax reasons.
A person who gives an invoice to their client.
A person who is trained and hired.
True or false? A new employee must fill out a
W-4.
False
True
The pay earned by hourly-paid employees is
usually referred to as?
Salary
Wage
What is a contractor?
Someone receiving cash payments.
A person receiving payment for a task in its
entirety.
A person who uses a W-2 for tax reasons.
Someone trained in-house.
Who is responsible for paying taxes deducted
from employee's check?
The employee is responsible for taxes deducted from
their check.
The state of which the employee lives in is
responsible for taxes deducted from an employee's check.
The IRS is responsible for the taxes deducted from
an employee's check.
The employer is responsible for paying taxes
deducted from an employee's check to the appropriate agency.
The amount of pay that an employee "takes
home" or can deposit into the bank is called?
Margin
Gross
Net
What is the primary objective of payroll?
Accurate and timely payment to employees including
deductions and withholdings.
Unilateral delivery of checks and mail.
Successful delivery of checks to management.
Casual payment of employees at random intervals.
Which of the following is a payroll-related
tax that is imposed on employers?
FINRA taxes.
NAFTA taxes.
FISA taxes.
FICA taxes.
A bonus is listed under what category?
Depreciation.
Benefits.
Shrinkage.
Rent.
What is the function of payroll?
To hand out paychecks.
Records keeping.
The recording of salaries, wages, bonuses, and
deductions.
Accounting.
What is gross pay?
Neither of these
The total amount earned, after taxes
The total amount earned, before taxes
What is a reason an employee might see a
garnishment on their paycheck?
Logical payment of bills.
Good performance.
Child support.
Sound financial planning.
True or false? A fiscal year must start on
January 1st.
False
True
How many yearly paychecks should a bi-weekly
pay period yield to an employee?
26
36
53
82
401K deductions are calculated from an
employee's ...
Gross Wages before taxes
None of the answers are correct
After taxes but before any other deductions are
taken
Net wages after taxes
In the General Journal, which side would your
payroll tax expense be located?
Ledger
Journal
Credit
Debit
What type of form is used to determine the
amount of withholding taxes deducted from an employees check?
1099
W-2
I-9
W-4
What is an ACH payment related to?
All of these
Local taxation
Direct deposits
Financial privacy
What tax document is provided at the end of
the year to independent contractors and includes all payments paid?
W-9
I-9
W-2
W-4
1099 Misc Form
What requirements does the FLSA have for
records keeping?
Lower taxes for higher performance.
Higher taxes for lower performance.
Payment for tenured employees.
None beside accurate record keeping.
What type of form is used to pay funds
directly to employees bank account?
Direct Deposit Form
Payroll Distribution Form
Funds Transfer Form
ACH Direct Transfer Form
What forms are filed at the end of the year to
report employee wages to IRS?
W-2
W-4
1040
I-9
1099
Are you obligated to set up a method of
taxation for independent contractors?
Yes.
No.
You must mutually agree on taxation.
The government will set up their taxes for them.
What is the standard rate for Medicare taxes?
1.23%
1.45%
10%
2%
Which form is filled out by the employee and
includes an employees withholding for federal tax purposes?
W-2
1099
1040
W-4
What is the current medicare taxable rate for
2012?
1.45%
4.2%
5.2%
5.65%
7.65%
What form is required to verify employment
eligibility for a new or potential employee?
I-9
W-9
1099
W-2
W-4
Who is a “nominee”?
The Guarantor.
Delegated parties given complete authoriy to act on
behalf of an entity for duties including payroll.
An employee who makes significant political
contributions.
Delegated parties who are given limited authority
to act on behalf of an entity for duties including payroll.
What is a tax outside the scope of Federal
taxes that an employer and employee are legally obligated to?
Medicare tax.
Federal income tax.
State Income Tax
Inheritance tax.
If exempt employee Dr. Banks worked 48 hours
in one week and 46 hours in a second week, how much overtime should he be paid?
14 hours OT
28 hours OT
None
6 hours OT
8 hours OT
An exempt employee is exempt from...?
Medicare Taxes
All Federal and State taxes
None of the above answers are correct
Social Security Taxes
Overtime
What is the maximum taxable earnings allowed
for medicare?
$106,800
The is no maximum taxable earnings for medicare?
$110,100
$145,000
$102,400
A employee garnishment is usually taken out of
an employee's check when?
After taxes. Amount is deducted from the net check.
Before taxes to assure there is enough to cover the
garnishment.
Garnishments are taken from the gross amount of
check
Garnishments are a pre-taxed deduction.
Which tax can you elect to be paid for in
advance in your check if you qualify?
FIT
Fica
Medicare
EIC
SS Tax
What type of tax return is used to file
employee deducted and employer matched payroll taxes at the end of a quarter?
UCT-6
941 Tax Return
940 Tax Return
945 Tax Return
When accounting for taxes payable, how are
they listed?
Credit.
Journal.
Debit.
Ledger.
If you were recording journal entries for wage
expenses, where would they be listed?
Credit.
Ledger.
Debit.
Journal.
What form must a contractor include to not be
considered an employee?
Check.
Invoice
NDA
Agreement.
What two accounting records are payroll
typically recorded to?
Income Statement and Balance Sheet
They are not recorded.
Front and back.
General ledger and income statement.
Which form is used to correct an employees
reported wages to IRS after W-2's have been issued?
Resend W-2 with correct information
W-4C
W-2C
W-2 Misc
W-2 Revised
Which tax return is used to file federal
annual employer paid taxes?
915 Tax Return
941 Tax Return
945 Tax Return
943 Tax Return
940 Tax Return
What is the current employer tax rate for FICA
social security and medicare?
4.2
5.2%
7.65%
1.45
Which form is needed for independent
contractors or vendors who are seeking payment for their products/services?
W-2
I-9
W-4
1099
W-9
How long should a W-4 be kept on file?
Twelve years.
Five years.
Two years.
Ten years.
A non-exempt employee works 38 hours one week
and 46 hours the next week. How many hours should this employee be paid for two
weeks if guaranteed 40 hours?
none of the answers are correct
The employee should be paid 78 regular hours and 6
overtime hours.
The employee should be paid 86 hours. 78 reg hours,
2 guarantee hours and 6 OT hours.
The employee should be paid 78 regular hours. No
overtime
The employee should be paid 80 regular hours.
How long should an employer retain payroll
information?
Five years.
Fifty years.
Three years.
Ten years.
A non-exempt employee worked 48 hours one week
which included a holiday and 46 hours the next week. How much OT pay is due to
this employee?
8 hours of OT
None. The employee is non-exempt
Only 6 hours OT
14 hours of OT
None of the answers are correct
If an employee's gross wages are $10,000,
federal withholding is $1,000 and the employee wages YTD is $112,000, how much
more tax money should be taken from employee's check?
$145.00
$765.00
$565.00
$520.00
$0.00
Where is a student's EIN generally registered?
PAWS
ACC
EIS
SEC
Where do you look to find payroll withholding
deductions based on employee elected filing status?
IRS Tax Table
Your state's Dept of Labor Tax Rate Schedule
Dept of Revenue Services
Circular E for that year
What is the current maximum SS taxable wage
amount for 2012?
$106,800
There is no maximum taxable wage for SS
$200,000
$102,400
$110,100
What is the current 2012 FICA SS rate for
employees?
7.65%
Not enough information
4.2%
1.45%
6.2%
If an employer's unemployment rate is 1% how
much taxes do the employees owe on $1000.00?
$100
$1
Not enough information
$0
$10
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