Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Employers must request a(n) ________ for the Internal Revenue Service to track a firm's payroll tax obligations.

Accepted Answer

A)  Social Security Number 
B)  Employer Registration Number 
C)  Tax Identification Number 
D)  Employer Identification Number

Question 3

________ is the state counterpart of the Federal Unemployment Tax Act.

Accepted Answer

A)  Fair Labor Standards Act 
B)  Worker's compensation insurance 
C)  State Income Tax Act 
D)  State Unemployment Tax Act

Question 4

Payroll taxes were instituted by the 16th Amendment to the United States Constitution:

Accepted Answer

A)  To pay for governmental salaries. 
B)  To make money from businesses that had employees. 
C)  To fund infrastructure improvements of booming cities. 
D)  To penalize people who needed employment.

Question 5

Contemporary payroll practices reflect:

Accepted Answer

A)  The increased use of manual payroll accounting systems. 
B)  The decrease in labor costs that reflects the effect of the economic recession. 
C)  The strategic use of payroll data as a company planning tool. 
D)  The replacement of accounting personnel with computerized systems.

Question 6

The Age Discrimination in Employment Act of 1967 prevented mandatory retirement for workers over the age of:

Accepted Answer

A)  55. 
B)  50. 
C)  45. 
D)  40.

Question 7

Paycards represent a trend in employee compensation that alleviates the employee's need for:

Accepted Answer

A)  Filing data about time worked. 
B)  Bank account establishment. 
C)  Functional literacy. 
D)  Workplace competence.

Question 8

Which Act governs the minimum wage that must be paid to nonexempt workers?

Accepted Answer

A)  FICA 
B)  FLSA 
C)  FUTA 
D)  SSA

Question 9

Which of the following is not a privacy act related to payroll records?

Accepted Answer

A)  Community Property Act of 1990. 
B)  Freedom of Information Act. 
C)  U.S. Department of Labor OCFO-1. 
D)  U.S. Department of Health and Human Services Privacy Act 09-40-0006.

Question 10

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?

Accepted Answer

A)  Accuracy of employee-entered data. 
B)  Employer oversight of stored data. 
C)  Employee website navigation issues. 
D)  Security of personnel data.

Question 11

The USERRA legislation provided the following:

Accepted Answer

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

Question 12

Worker's compensation is an insurance policy used for

Accepted Answer

A)  Wage continuation after job-related injuries. 
B)  Payment of mandatory payroll taxes. 
C)  Remittance of wages mandated by the FLSA. 
D)  Settlement of payroll-related lawsuits.

Question 13

The ________ prohibited discrimination based on race, creed, color, gender, or national origin.

Accepted Answer

A)  Lilly Ledbetter Fair Pay Act of 2009 
B)  Civil Rights Act of 1964 
C)  Equal Pay Act of 1963 
D)  Fair Labor Standards Act of 1935

Question 14

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?

Accepted Answer

A)  Handwritten time slips on which the employee documents the times worked on each job. 
B)  Verbal reporting via telephone of time worked per job. 
C)  Computer log-ins when employees change tasks. 
D)  Radio-frequency time cards to track time allocations.

Question 15

The classification of workers as exempt and nonexempt pertains to the provisions of the:

Accepted Answer

A)  Social Security Act. 
B)  Equal Pay Act. 
C)  Fair Labor Standards Act. 
D)  Federal Insurance Contributions Act.

Question 16

Why do different methods of time collection devices (e.g., time cards, biometric devices) exist among companies?

Accepted Answer

A)  They replace personnel with computers, which prevents ethical issues. 
B)  They maintain precise tracking of employee whereabouts. 
C)  They promote compensation accuracy that matches company needs. 
D)  They alleviate the need for internal control.

Question 17

The ethical principle of ________ concerns what is right and just for all parties involved.

Accepted Answer

A)  Due Care 
B)  Integrity 
C)  Public Interest 
D)  Objectivity and Independence

Question 18

An example of an accounting software package that fosters electronic payroll processing is:

Accepted Answer

A)  Sage Books. 
B)  Quick50. 
C)  QuickBooks. 
D)  GreatBooks.

Question 19

Employment legislation during the 1930s included which of the following Acts:

Accepted Answer

A)  FLSA, FUTA, and FICA. 
B)  ADEA, Davis-Bacon Act, and FLSA. 
C)  Walsh-Healey Act, FICA, and ERISA. 
D)  FUTA, ADA, and FLSA.

Question 20

Which privacy act safeguards information contained in private personnel records and mandates information safekeeping?

Accepted Answer

A)  DHHS Privacy Act 09-04-0006. 
B)  Privacy Act of 1974. 
C)  Common Law Privacy Act. 
D)  Computer Fraud and Abuse Act of 1986.

Exam 1: Payroll Practices and System Fundamentals