Deck 1: The Need for Payroll and Personnel Records

Question 1

Internal payroll reports are used to inform a firm's managers and decision-makers about labor costs.

Answer 1

True

Question 2

The purpose of payroll legislation is to:
• Promote governmental involvement in business activities.
• Increase the complexity involved in compensating employees.
• Generate increased tax revenue for governmental entities.
• Protect the rights of employees by legislating workplace equity.

Answer 2

Protect the rights of employees by legislating workplace equity.

Question 3

The IRS uses EINs to track employers for tax purposes.

Answer 3

True

Question 4

The Age Discrimination in Employment Act (ADEA) prohibits discrimination in employment practices for workers who are older than age 50.

Question 5

The ethical principle of due care pertains to the upholding of rights and justice of stakeholders.

Question 6

According to FMLA, during the time that an employee is on family leave:
• The employer is responsible for alerting the employee to changes in processes and benefits.
• The employee is responsible for staying in touch with the employer.
• The employer may make changes to the employee's benefits.
• The employer must not contact the employee during the leave.

Question 7

The Age Discrimination in Employment Act of 1967 prevented mandatory retirement for workers over the age of:
• 50.
• 55.
• 45.
• 40.

Question 8

The Worker's Compensation Act of 1935 legislated the payment of worker's compensation insurance.

Question 9

Payroll taxes were instituted by the 16th Amendment to the United States Constitution:
• To penalize people who needed employment.
• To fund infrastructure improvements of booming cities.
• To make money from businesses that had employees.
• To pay for governmental salaries.

Question 10

Payroll accounting systems may involve an integrated software package that contains business- planning tools.

Question 11

Which Act extended medical benefits for certain terminated employees?
• ADEA
• ERISA
• COBRA
• OSHA

Question 12

Employment legislation during the 1930s included which of the following Acts:
• ADEA, Davis-Bacon Act, and FLSA.
• FUTA, ADA, and FLSA.
• FLSA, FUTA, and FICA.
• Walsh-Healey Act, FICA, and ERISA.

Question 13

The payroll volume tends to be greater for small companies than for large businesses.

Question 14

The USERRA legislation provided the following:
• Military service members receive mandatory priority during the hiring process.
• Military service members receive preferential treatment for promotions and raises during the normal course of business.
• Military members must receive the same promotions and compensation that they would have received when they return from active duty.
• Injured military veterans must be allowed to return to work, but their compensation may be reduced based on their disability.

Question 15

The Lilly Ledbetter Fair Pay Act of 2009 was the first act that mandated equal pay for men and women who perform identical tasks.

Question 16

The use of outsourced payroll relieves employers of the responsibility for payroll accuracy.

Question 17

The Sarbanes-Oxley Act legislated penalties for violations of which Act?
• ERISA
• PRWOR
• DOMA
• HIPAA

Question 18

The U.S. v. Windsor case repealed an Act and affected payroll tax withholdings for certain employees. Which Act did Windsor repeal?
• OSHA
• ATRA
• DOMA
• ARRA

Question 19

Payroll-related legislation often reflects emerging issues in societal evolution.

Question 20

Within how many days after initially commencing work must an employer report a new employee, according to PRWOR?
• 30
• 20
• 10
• 7

Question 21

The payroll accountant for Candor, Inc. was found to have issued payroll checks in the name of several terminated employees. Upon investigation, the checks were all deposited to the same bank account, which was owned by the payroll accountant. Which ethical principle did the payroll accountant violate?
• Professional Competence and Due Care
• Integrity
• Confidentiality
• Professionalism

Question 22

The main purpose of the Federal Insurance Contributions Act (FICA) was to:
• Mandate worker's compensation insurance for employers.
• Provide life insurance for all employees.
• Provide health insurance for all employees.
• Provide benefits for workers who were unable to work because of age, disability, or death.

Question 23

Leslie is the accountant for a major movie production. She is approached by a group of people from the press who ask her questions about the salaries of the actors and actresses involved in the film. According to the Code of Ethics, which principle most closely governs the appropriate conduct in this situation?
• Confidentiality
• Professional Competence and Due Care
• Integrity
• Objectivity and Independence

Question 24

The Fair Labor Standards Act contains provisions for:
• Full-time workers, part-time workers, and independent contractors.
• Pay periods, paid time off, and minimum wage.
• Overtime pay, minimum wage, and working conditions.
• Minimum wage, maximum wage, and overtime pay.

Question 25

Which of the following represents a payroll system privacy breach by Susan, a payroll accountant?
• Susan discusses specific information about the company's federal contracts with friends during lunch.
• Susan shares information about labor costs with company executives.
• Susan places employee payroll files in a cabinet to which only she and her supervisor have access.
• Susan alerts department managers about potential FLSA violations in their departments.

Question 26

Peter is the owner of a fast-food franchise. When his payroll accountant quit, he hired his wife, Karen, to take over the payroll responsibilities. Peter prefers to review the payroll records prior to disbursement and often asks Karen to add or subtract amount from employee pay. Which ethical principle most closely describes Peter and Karen's unethical actions?
• Confidentiality
• Integrity
• Professional Competence and Due Care
• Objectivity and Independence

Question 27

What is the effect of payroll-related legislation on payroll practice?
• Legislation explicitly dictates specific activities of payroll accountants.
• Legislation has prescribed the format and delivery of a payroll system.
• Legislation highlights the need for firms to create well-designed payroll systems.
• Legislation has alleviated the need for a company to design its own payroll system.

Question 28

Michael is the payroll accountant for a non-profit. In his personal life, he is also a single father of three young children. On the day that payroll is supposed to be issued, his children are sick and he is unavailable to be at work. The employees' paychecks cannot be issued without his presence. Which ethical principle most closely governs this situation?
• Integrity
• Objectivity and Independence
• Responsibilities
• Professionalism

Question 29

Which most closely identifies why it is important for payroll accountants to adhere to the Code of
Ethics?
• To maintain company profitability.
• To overlook fraudulent actions of company officers.
• To maintain personal standards only.
• To protect the assets of the company and remit money owed to the government.

Question 30

Worker's compensation insurance premiums:
• Are the same amount for all employees of a company, regardless of employee task.
• Are remitted in full at the end of the year to ensure accuracy.
• Are governed by state laws and vary according to worker job classification.
• Are mandated by the Fair Labor Standards Act.

Question 31

The Current Tax Payment Act changed employer remittance of taxes by:
• Requiring employers to remit taxes at specific times during the year.
• Legislating the amounts of tax withheld from each employee.
• Instituting the mandatory transfer of payroll tax liabilities.
• Calling for employers to remit only the current portions of taxes due.

Question 32

Jonathan is the payroll accountant for Terrafirm Company. The company has experienced a rise in business that has increased Jonathan's workload to more than double his original amount. Because of the business increase, he has not been able to engage in the continuing professional education (CPE) that his payroll certification requires. When asked by his employer, Jonathan claims to be current with his CPE. According to the AICPA Code of Ethics, which of the following most closely describes the principle that Jonathan has violated?
• Objectivity and Independence
• Integrity
• Professionalism
• Professional Competence and Due Care

Question 33

Which Act governs the minimum wage that must be paid to nonexempt workers?
• FLSA
• SSA
• FICA
• FUTA

Question 34

Which of the following is not an option available to payroll accountants?
• Payroll preparation through manual, handwritten spreadsheets.
• Reduced responsibility for accuracy because of outsourcing services.
• Increased use of paycards as a vehicle for paying employees.
• Governmentally mandated and monitored payroll outsourcing.

Question 35

Which form does the Internal Revenue Service use to keep track of employers?
• SS-8
• W-4
• SS-4
• ES-4

Question 36

In the event of an ethical breach by a payroll accountant, which entity is ultimately liable for any monetary damages due to stakeholders?
• The company's CEO or president
• The entity that issued the license to the accountant
• The governmental entity associated with company oversight
• The payroll accountant

Question 37

Contemporary payroll practices reflect:
• The increased use of manual payroll accounting systems.
• The strategic use of payroll data as a company planning tool.
• The replacement of accounting personnel with computerized systems.
• The decrease in labor costs that reflects the effect of the economic recession.

Question 38

Which of the following is a payroll accountant's responsibility?
• Preparation for corporate safety audits.
• Wage negotiations with prospective employees.
• Preparation of payroll tax returns.
• Construction contract negotiations with governmental entities.

Question 39

Which of the following is among the basic guidelines of a Code of Ethics?
• Professionalism
• Company Interest
• Corporate Profitability
• Interdependence

Question 40

The classification of workers as exempt and nonexempt pertains to the provisions of the:
• Equal Pay Act.
• Federal Insurance Contributions Act.
• Social Security Act.
• Fair Labor Standards Act.

Question 41

is the state counterpart of the Federal Unemployment Tax Act.
• State Income Tax Act
• Fair Labor Standards Act
• Worker's compensation insurance
• State Unemployment Tax Act

Question 42

Many large companies have website portals in which employees may view and change payroll data. Which of the following is the most significant concern about such websites?
• Employee website navigation issues.
• Security of personnel data.
• Employer oversight of stored data.
• Accuracy of employee-entered data.

Question 43

Why do different methods of time collection devices (e.g., time cards, biometric devices) exist among companies?
• They replace personnel with computers, which prevents ethical issues.
• They promote compensation accuracy that matches company needs.
• They alleviate the need for internal control.
• They maintain precise tracking of employee whereabouts.

Question 44

Jonah is one of the payroll accountants in a company that specializes in custom work for each customer. His biggest payroll challenge is accurate allocation of labor to jobs. Which of the following represents the most accurate option to track the company's labor costs?
• Handwritten time slips on which the employee documents the times worked on each job.
• Verbal reporting via telephone of time worked per job.
• Computer log-ins when employees change tasks.
• Radio-frequency time cards to track time allocations.

Question 45

What is the most significant challenge pertaining to payroll that small businesses face?
• Availability of payroll-trained personnel.
• Availability of accounting resources.
• Accessibility of on-site payroll guidance.
• Accessibility of free on-site payroll software.

Question 46

An example of an accounting software package that fosters electronic payroll processing is:
• SageBooks.
• QuickBooks.
• Quick100.
• GreatBooks.

Question 47

Paycards represent a trend in employee compensation that alleviates the employee's need for:
• Filing data about time worked.
• Workplace competence.
• Functional literacy.
• Bank account establishment.

Question 48

Why is outsourced payroll popular among accounting professionals?
• Records generated by outsourced vendors are not subject to retention rules.
• Payroll processing is always simpler and quicker.
• Time required for payroll processing is reduced.
• Data generated by the outsource company is completely accurate.

Question 49

Which law requires a company to use certified payroll?
• Copeland Anti-Kickback Act
• Walsh-Healey Public Contracts Act
• Davis-Bacon Act
• Sarbanes-Oxley Act

Question 50

Which of the following is not a privacy act related to payroll records?
• U.S. Department of Health and Human Services Privacy Act 09-40-0006.
• U.S. Department of Labor OCFO-1.
• Freedom of Information Act.
• Community Property Act of 1990.

Question 51

Joel is the payroll accountant for a company. He has been notified of an impending audit of all accounting records. What is Joel's role in the audit?
• He must agree to serve on the audit staff for other companies.
• He must be available to answer questions and grant access to payroll records.
• He must prevent privacy breaches by disallowing access to payroll records.
• He is required to be absent during the audit to avoid influencing the results.

Question 52

The prohibited discrimination based on race, creed, color, gender, and national origin.
• Lilly Ledbetter Fair Pay Act of 2009
• Civil Rights Act of 1964
• Fair Labor Standards Act of 1935
• Equal Pay Act of 1963

Question 53

Worker's compensation is an insurance policy used for
• Wage continuation after job-related injuries.
• Payment of mandatory payroll taxes.
• Settlement of payroll-related lawsuits.
• Remittance of wages mandated by the FLSA.

Question 54

Which privacy act safeguards information contained in private personnel records and mandates information safekeeping?
• Computer Fraud and Abuse Act of 1986.
• Privacy Act of 1974.
• DHHS Privacy Act 09-04-0006.
• Common Law Privacy Act.

Question 55

Which court case updated the definition of spouse to include same-sex unions?
• Obergefell v. Hodges.
• CIGNA v. Amara.
• Young v. Wackenhut.
• Pollard v. DuPont.

Question 56

The largest challenge to companies that use manual payroll processing is:
• Filing appropriate governmental reports.
• Maintaining accurate personnel records.
• Obtaining accurate employee data.
• Integrating current tax tables.

Question 57

If a company chooses to use computer-based accounting, which of the following is required?
• A standalone system that is dedicated to payroll processing.
• Certification by a CPA prior to use for payroll processing.
• Regularly scheduled software updates.
• Certification and bonding of payroll personnel.

Question 58

Positive aspects of the use of Internet-based accounting software includes which of the following?
• Suitability for highly complex large businesses.
• Continual updates for tax rate and other changes.
• Unlimited options for company personnel.
• Fixed software layout for consistency among companies.

Question 59

According to the Public Company Accounting Oversight Board, personal or family ownership in excess of five percent of a client's business may compromise an accountant's
• Objectivity and Independence.
• Professional Competence and Due Care.
• Professionalism.
• Integrity.

Question 60

Which of the following is true about independent contractors within the context of payroll?
• A temporary working relationship must exist.
• They are employees of the company.
• The worker controls hours worked and exercises judgment.
• Tools and facilities are provided by the employer.

Question 61

To re-verify an employee's employment authorization, must be used.
• Form I-9
• Form W-4
• E-Verify
• Form W-2

Question 62

Prevailing local wages and wage classification strategies for government contractors were mandated by the .
• Equal Pay Act
• Fair Labor Standards Act
• Davis-Bacon Act
• Walsh-Healey Public Contracts Act

Question 63

An accountant must remain current in his or her knowledge of current payroll practices, according to the ethical principle of .
• Responsibilities
• Public Interest
• Due Care
• Integrity

Question 64

Companies may use and to allow employees to have secure, rapid access to their compensation.
• Cash; Checks
• Cash; Direct Deposit
• Paycards; Checks
• Direct Deposit; Paycards

Question 65

To verify employment eligibility for employees, is mandatory for all employers but is not.
• Form W-4; Form I-9
• E-Verify; Form I-9
• E-Verify; Form W-4
• Form I-9; E-Verify

Question 66

A provision of the made managers and supervisors ineligible to participate in the tip pools, when used for tipped employees.
• Tipped Employees Act
• Tax Cuts and Jobs Act
• Consolidated Appropriations Act
• Equal Employment Act

Question 67

The ethical principle of concerns what is right and just for all parties involved.
• Objectivity and Independence
• Due Care
• Public Interest
• Integrity

Question 68

Congress passed the and to assist displaced workers.
• 16th Amendment; Fair Labor Standards Act
• Federal Unemployment Tax Act; Social Security Insurance Act
• Social Security Act; Medicare Act
• Federal Income Contributions Act; Federal Unemployment Tax Act

Question 69

Employers must request a(n) for the Internal Revenue Service to track a firm's payroll tax obligations.
• Social Security Number
• Employer Registration Number
• Tax Identification Number
• Employer Identification Number

Question 70

The instituted significant changes to payroll taxes, especially adjustments for inflation and employee income tax computation.
• Social Security Act
• Walsh-Healey Public Contracts Act
• Tax Cuts and Jobs Act
• Affordable Care Act

Question 71

The modified the statute of limitations imposed by the Equal Pay Act of 1963.
• Family Medical Leave Act of 1993
• Civil Rights Act of 1991
• Lilly Ledbetter Fair Pay Act of 2009
• Consolidated Omnibus Budget Reformation Act of 1986

Question 72

The mandated that employers verify an employee's legal ability to work in the United
States.
• Health Insurance Portability and Accountability Act of 1996
• American Reinvestment and Recovery Act of 2009
• Immigration Reform and Control Act of 1986
• Personal Responsibility and Work Opportunity Reconciliation Act of 1996

Question 73

The Consolidated Appropriations Act included an increase in funding for the program.
• Medicare
• E-Verify
• Child Health and Infant Protection
• Disability Accommodations

Question 74

is required under the Davis-Bacon Act for companies who do business with the Federal government.
• Outsourced payroll
• Certified payroll
• Computerized payroll
• Manual payroll