Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

IRS Regulation 26 CFR 1.6001 mandates ________ procedures as they pertain to payroll records, noting that it is the responsibility of the ________.

Accepted Answer

A)   File maintenance; employer
B)   Payroll review; payroll supervisor
C)   Check authorization; controller
D)   Employee time review; department manager

Question 3

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?

Accepted Answer

A)   The salesperson must receive termination pay immediately and forfeits all unpaid commissions.
B)   The salesperson's final pay is delayed to allow for computation of commissions.
C)   The final pay must include all commissions earned, in accordance with any pay agreement.
D)   The employee must receive final non-commission pay immediately, but any commission pay will be delayed.

Question 4

Which entity bears the responsibility for gaining approval for a foreign worker visa so a foreign employee may work legally in the United States?

Accepted Answer

A)   The employer
B)   The employee
C)   The U.S. State Department
D)   The employer's home country

Question 5

Individuals classified as ________ are processed as vendors of a firm.

Accepted Answer

A)   Exempt employees
B)   Nonexempt employees
C)   Government contract employees
D)   Independent contractors

Question 6

Which of the following items must exist in every employee's payroll file?

Accepted Answer

A)   Spouse's social security number
B)   Employment history
C)   Spouse's birth date
D)   Occupation

Question 7

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?

Accepted Answer

A)   Within 48 hours.
B)   At the next scheduled pay date.
C)   On the next business day.
D)   Within two weeks.

Question 8

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:

Accepted Answer

A)   For 10 years.
B)   For 15 years.
C)   For 20 years.
D)   Indefinitely.

Question 9

Which aspect of internal controls for payroll relates to the Sarbanes-Oxley Act?

Accepted Answer

A)   Protecting employee retirement funds
B)   Limiting the number of employees authorized to disburse payroll
C)   Cross-training employees and altering duties
D)   Ensuring the complexity of the audit trail

Question 10

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 2016 guidelines?

Accepted Answer

A)   $46,500
B)   $79,850
C)   $101,300
D)   None

Question 11

Which items must be contained in every hiring packet issued by an employer?

Accepted Answer

A)   Forms W-4 and I-9
B)   Employment contract with start date and pay agreement
C)   Descriptions of benefits and enrollment forms
D)   No items are mandated for issuance in a hiring packet.

Question 12

What is the difference between termination and resignation, as far as final pay is concerned?

Accepted Answer

A)   Resignation pay may be paid at the next regular pay date, but termination pay is subject to state law.
B)   Resignation and termination pay are subject to state regulations.
C)   Resignation pay must be paid within one week and termination pay must be the next business day.
D)   Resignation pay must be paid on the next business day and termination pay is due immediately.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is an example of a typical exempt salaried employee?

Accepted Answer

A)   Operations Manager.
B)   Accounting Clerk.
C)   Administrative Assistant.
D)   Machine Operator.

Question 15

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.

Accepted Answer

A)   Performance incentive
B)   Commission
C)   Piece-rate
D)   Nonexempt

Question 16

Josh, who is 21 years of age, is a new employee of XYZ Company. To establish his identity and employment authorization, he could present:

Accepted Answer

A)   His current United States passport.
B)   His library card and birth certificate.
C)   His driver's license and ATM card.
D)   His college transcript and driver's license.

Question 17

FATCA enforcement has been difficult because the Internal Revenue Service relies on ________ for reporting purposes.

Accepted Answer

A)   Intermediaries (e.g., banks) 
B)   Employers and employees
C)   Foreign countries
D)   Personal income tax returns

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

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? (Select all that apply.)

Accepted Answer

A)   Shredding
B)   Discarding
C)   Pulping
D)   Burning

Question 20

Upon termination from a firm, the employer must disburse the former employee's final pay ________.

Accepted Answer

A)   Immediately
B)   Within 24 hours
C)   At the next scheduled payday
D)   In accordance with state law

Exam 2: Payroll System Procedures

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:

Correct AnswerverifiedShow Answer

What is the difference between termination and resignation, as far as final pay is concerned?

Correct AnswerverifiedShow Answer

Which items must be contained in every hiring packet issued by an employer?

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

FATCA enforcement has been difficult because the Internal Revenue Service relies on ________ for reporting purposes.

Correct AnswerverifiedShow Answer

Which aspect of internal controls for payroll relates to the Sarbanes-Oxley Act?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

IRS Regulation 26 CFR 1.6001 mandates ________ procedures as they pertain to payroll records, noting that it is the responsibility of the ________.

Correct AnswerverifiedShow Answer

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 2016 guidelines?

Correct AnswerverifiedShow Answer

Which entity bears the responsibility for gaining approval for a foreign worker visa so a foreign employee may work legally in the United States?

Correct AnswerverifiedShow Answer

Individuals classified as ________ are processed as vendors of a firm.

Correct AnswerverifiedShow Answer

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?

Correct AnswerverifiedShow Answer

Which of the following is an example of a typical exempt salaried employee?

Correct AnswerverifiedShow Answer

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? (Select all that apply.)

Correct AnswerverifiedShow Answer

Josh, who is 21 years of age, is a new employee of XYZ Company. To establish his identity and employment authorization, he could present:

Correct AnswerverifiedShow Answer

Which of the following items must exist in every employee's payroll file?

Correct AnswerverifiedShow Answer

Upon termination from a firm, the employer must disburse the former employee's final pay ________.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

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IRS Regulation 26 CFR 1.6001 mandates procedures as they pertain to payroll records, noting that it is the responsibility of the .

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