Question 1

Garnishments are court-ordered amounts that an employer must withhold from an employee's pre-tax pay and remit to the appropriate authority.

Accepted Answer

A) True 
 B)False

Question 2

Tierney is a full-time nonexempt salaried employee who earns $990 per biweekly pay period.She is single with 1 withholding allowance and both lives and works in Maryland.Assuming that she had no overtime,what is the total of her federal and state taxes for a pay period? (Use the wage-bracket tables.Maryland state income rate is 2.0%.Round final answers to 2 decimal places. )

Accepted Answer

A)  $124.25 
B)  $113.80 
C)  $115.95 
D)  $110.78 
A)  $124.25 
B)  $113.80 
C)  $115.95 
D)  $110.78

Question 3

The percentage of the Medicare tax withholding _________________________.

Accepted Answer

A)  Is the same for every employee,regardless of income 
B)  Is subject to change based on the firm's profitability 
C)  Changes every year in response to industry needs 
D)  Remains the same for all employees who earn less than $200,000 
A)  Is the same for every employee,regardless of income 
B)  Is subject to change based on the firm's profitability 
C)  Changes every year in response to industry needs 
D)  Remains the same for all employees who earn less than $200,000

Question 4

Which of the following is true about cash as a method of paying employees?

Accepted Answer

A)  Cash is the most secure payment method. 
B)  Cash is the most widely used payment method. 
C)  Cash is readily transferable and highly liquid. 
D)  Cash is the most convenient pay method for employers. 
A)  Cash is the most secure payment method. 
B)  Cash is the most widely used payment method. 
C)  Cash is readily transferable and highly liquid. 
D)  Cash is the most convenient pay method for employers.

Question 5

Julio is single with 1 withholding allowance.He earned $1,025.00 during the most recent semimonthly pay period.He needs to decide between contributing 3% and $30 to his 401(k)plan.If he chooses the method that results in the lowest taxable income,how much will be withheld for federal income tax (based on the following table)?

Accepted Answer

A)  $65.00 
B)  $87.00 
C)  $90.00 
D)  Both yield the same tax amount 
A)  $65.00 
B)  $87.00 
C)  $90.00 
D)  Both yield the same tax amount

Question 6

Ramani earned $1,698.50 during the most recent biweekly pay period.He contributes $100 to his 401(k)plan.He is married and claims 3 withholding allowances.Based on the following table,how much federal income tax should be withheld from his pay?

Accepted Answer

A)  $122.00 
B)  $107.00 
C)  $99.00 
D)  $83.00 
A)  $122.00 
B)  $107.00 
C)  $99.00 
D)  $83.00

Question 7

The regular Medicare tax deduction is 1.45% for employee and employer and must be paid by all employees.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following deductions may be taken on a pre-tax basis (Select all that apply)?

Accepted Answer

A)  Cafeteria plan 
B)  Garnishments 
C)  Health insurance 
D)  Retirement plan 
A)  Cafeteria plan 
B)  Garnishments 
C)  Health insurance 
D)  Retirement plan

Question 9

Which of the following payment methods is growing in popularity among employees?

Accepted Answer

A)  Cash 
B)  Check 
C)  Direct Deposit 
D)  Paycard 
A)  Cash 
B)  Check 
C)  Direct Deposit 
D)  Paycard

Question 10

Which of the following is the correct sequence for computing net pay?

Accepted Answer

A)  Compute gross pay then deduct withholding and add FICA taxes to obtain net pay. 
B)  Compute gross pay,compute FICA,deduct pre-tax amounts,and deduct taxes. 
C)  Compute gross pay,deduct taxes,and add voluntary deductions. 
D)  Compute gross pay,deduct pre-tax amounts,compute FICA,deduct taxes,and deduct post-tax amounts. 
A)  Compute gross pay then deduct withholding and add FICA taxes to obtain net pay. 
B)  Compute gross pay,compute FICA,deduct pre-tax amounts,and deduct taxes. 
C)  Compute gross pay,deduct taxes,and add voluntary deductions. 
D)  Compute gross pay,deduct pre-tax amounts,compute FICA,deduct taxes,and deduct post-tax amounts.

Question 11

Melody is a full-time employee in Sioux City,South Dakota,who earns $3,600 per month and is paid semimonthly.She is married with 1 withholding allowance (use the wage-bracket tables).She has a qualified health insurance deduction of $50 per pay period and contributes 3% to her 401(k),both of which are pre-tax deductions.What is her net pay? (Do not round interim calculations,only round final answer to two decimal points. )

Accepted Answer

A)  $1,696.00 
B)  $1,524.27 
C)  $1,426.13 
D)  $1,394.87 
A)  $1,696.00 
B)  $1,524.27 
C)  $1,426.13 
D)  $1,394.87

Question 12

Which of the following guidelines does the IRS use to evaluate the tax treatment of supplemental health insurance?

Accepted Answer

A)  If the income derived is taxable,then the cost is tax-free. 
B)  If the income derived is nontaxable,then the cost must be taxed. 
C)  If the income derived will be tax free,then the cost is also tax exempt. 
D)  If the income derived is taxable,then the cost is taxable. 
A)  If the income derived is taxable,then the cost is tax-free. 
B)  If the income derived is nontaxable,then the cost must be taxed. 
C)  If the income derived will be tax free,then the cost is also tax exempt. 
D)  If the income derived is taxable,then the cost is taxable.

Question 13

What role does the employer play regarding an employee's federal withholding tax?

Accepted Answer

A)  Collector and depositor 
B)  Reporter and depositor 
C)  Collector and verifier 
D)  Verifier and reporter 
A)  Collector and depositor 
B)  Reporter and depositor 
C)  Collector and verifier 
D)  Verifier and reporter

Question 14

Which of the following is used in the determination of the amount of federal income tax to be withheld from an employee per pay period?

Accepted Answer

A)  Date of birth 
B)  Annual salary 
C)  Marital status 
D)  Prior year's tax return 
A)  Date of birth 
B)  Annual salary 
C)  Marital status 
D)  Prior year's tax return

Question 15

Steve is a full-time exempt employee at a local electricity co-operative.He earns an annual salary of $43,325 and is paid biweekly.What is his Social Security tax deduction for each pay period? (Do not round interim calculations,only round final answer to two decimal points. )

Accepted Answer

A)  $123.95 
B)  $103.31 
C)  $98.67 
D)  $106.34 
A)  $123.95 
B)  $103.31 
C)  $98.67 
D)  $106.34

Question 16

The amount of federal income tax decreases as the number of allowances increases.

Accepted Answer

A) True 
 B)False

Question 17

Vivienne is a full-time exempt employee in DeKalb County,Indiana,and is paid biweekly.She earns $39,000 annually,and is married with 2 withholding allowances.Her state income tax deduction is $44.46,and the DeKalb County income tax deduction is $19.62.What is the total amount of her FICA,federal,state,and local taxes per pay period,assuming no Pre-Tax Deductions? (Use the wage-bracket table to determine the federal tax deduction.Do not round intermediate calculations,only round final answer to two decimal points. )

Accepted Answer

A)  $239.83 
B)  $320.83 
C)  $265.83 
D)  $270.83 
A)  $239.83 
B)  $320.83 
C)  $265.83 
D)  $270.83

Question 18

A retirement plan that allows employees to gain shares of ownership in their firm is called a(n)_____________.

Accepted Answer

A)  IRA 
B)  ESOP 
C)  SIMPLE 
D)  401(k) 
A)  IRA 
B)  ESOP 
C)  SIMPLE 
D)  401(k)

Question 19

Trish earned $1,734.90 during the most recent semimonthly pay period.She is married and has 3 withholding allowances and has no pre-tax deductions.Based on the following table,how much should be withheld from her gross pay for federal income tax?

Accepted Answer

A)  $91.00 
B)  $89.00 
C)  $95.00 
D)  $69.00 
A)  $91.00 
B)  $89.00 
C)  $95.00 
D)  $69.00

Question 20

Post-Tax Deductions are amounts ____________________________________.

Accepted Answer

A)  That are voluntarily chosen by the employee 
B)  That the employer chooses to withhold after assessing the employee's tax liability 
C)  That include both mandatory and voluntary deductions 
D)  That include only mandatory deductions like garnishments and union dues 
A)  That are voluntarily chosen by the employee 
B)  That the employer chooses to withhold after assessing the employee's tax liability 
C)  That include both mandatory and voluntary deductions 
D)  That include only mandatory deductions like garnishments and union dues

Garnishments are court-ordered amounts that an employer must withhold from an employee's pre-tax pay and remit to the appropriate authority.

The percentage of the Medicare tax withholding _________________________.

Which of the following is true about cash as a method of paying employees?

Ramani earned $1,698.50 during the most recent biweekly pay period.He contributes $100 to his 401(k)plan.He is married and claims 3 withholding allowances.Based on the following table,how much federal income tax should be withheld from his pay?

The regular Medicare tax deduction is 1.45% for employee and employer and must be paid by all employees.

Which of the following deductions may be taken on a pre-tax basis (Select all that apply)?

Which of the following payment methods is growing in popularity among employees?

Which of the following is the correct sequence for computing net pay?

Which of the following guidelines does the IRS use to evaluate the tax treatment of supplemental health insurance?

What role does the employer play regarding an employee's federal withholding tax?

Which of the following is used in the determination of the amount of federal income tax to be withheld from an employee per pay period?

Steve is a full-time exempt employee at a local electricity co-operative.He earns an annual salary of $43,325 and is paid biweekly.What is his Social Security tax deduction for each pay period? (Do not round interim calculations,only round final answer to two decimal points. )

The amount of federal income tax decreases as the number of allowances increases.

A retirement plan that allows employees to gain shares of ownership in their firm is called a(n)_____________.

Trish earned $1,734.90 during the most recent semimonthly pay period.She is married and has 3 withholding allowances and has no pre-tax deductions.Based on the following table,how much should be withheld from her gross pay for federal income tax?

Post-Tax Deductions are amounts ____________________________________.

Payroll Practices and System Fundamentals

Payroll System Procedures

Gross Pay Computation

Employer Payroll Taxes and Labor Planning

Payroll Register, employees Earning Records, and Accounting System Entries

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Exam 4: Employee Net Pay and Pay Methods

Garnishments are court-ordered amounts that an employer must withhold from an employee's pre-tax pay and remit to the appropriate authority.

The percentage of the Medicare tax withholding _________________________.

Which of the following is true about cash as a method of paying employees?

Ramani earned $1,698.50 during the most recent biweekly pay period.He contributes $100 to his 401(k)plan.He is married and claims 3 withholding allowances.Based on the following table,how much federal income tax should be withheld from his pay?

The regular Medicare tax deduction is 1.45% for employee and employer and must be paid by all employees.

Which of the following deductions may be taken on a pre-tax basis (Select all that apply)?

Which of the following payment methods is growing in popularity among employees?

Which of the following is the correct sequence for computing net pay?

Which of the following guidelines does the IRS use to evaluate the tax treatment of supplemental health insurance?

What role does the employer play regarding an employee's federal withholding tax?

Which of the following is used in the determination of the amount of federal income tax to be withheld from an employee per pay period?

Steve is a full-time exempt employee at a local electricity co-operative.He earns an annual salary of $43,325 and is paid biweekly.What is his Social Security tax deduction for each pay period? (Do not round interim calculations,only round final answer to two decimal points. )

The amount of federal income tax decreases as the number of allowances increases.

A retirement plan that allows employees to gain shares of ownership in their firm is called a(n)_____________.

Trish earned $1,734.90 during the most recent semimonthly pay period.She is married and has 3 withholding allowances and has no pre-tax deductions.Based on the following table,how much should be withheld from her gross pay for federal income tax?

Post-Tax Deductions are amounts ____________________________________.

Payroll Practices and System Fundamentals

Payroll System Procedures

Gross Pay Computation

Employer Payroll Taxes and Labor Planning

Payroll Register, employees Earning Records, and Accounting System Entries

Filters