Question 1

The Consolidated Appropriations Act included an increase in funding for the program.

Accepted Answer

A) Medicare 
B) E-Verify 
C) Child Health and Infant Protection 
D) Disability Accommodations

Question 2

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

Accepted Answer

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

Question 3

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?

Accepted Answer

A) Conﬁdentiality 
B) Professional Competence and Due Care 
C) Integrity 
D) Objectivity and Independence

Question 4

Prevailing local wages and wage classiﬁcation strategies for government contractors were mandated by the _____.

Accepted Answer

A) Equal Pay Act 
B) Fair Labor Standards Act 
C) Davis-Bacon Act 
D) Walsh-Healey Public Contracts Act

Question 5

What is the effect of payroll-related legislation on payroll practice?

Accepted Answer

A) Legislation explicitly dictates speciﬁc activities of payroll accountants. 
B) Legislation has prescribed the format and delivery of a payroll system. 
C) Legislation highlights the need for ﬁrms to create well-designed payroll systems. 
D) Legislation has alleviated the need for a company to design its own payroll system.

Question 6

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

Accepted Answer

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

Question 7

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

Accepted Answer

A) Objectivity and Independence. 
B) Professional Competence and Due Care. 
C) Professionalism. 
D) Integrity.

Question 8

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

Accepted Answer

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

Question 9

Why is outsourced payroll popular among accounting professionals?

Accepted Answer

A) Records generated by outsourced vendors are not subject to retention rules. 
B) Payroll processing is always simpler and quicker. 
C) Time required for payroll processing is reduced. 
D) Data generated by the outsource company is completely accurate.

Question 10

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

Accepted Answer

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

Question 11

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

Accepted Answer

A) SageBooks. 
B) QuickBooks. 
C) Quick100. 
D) GreatBooks.

Question 12

Which Act extended medical beneﬁts for certain terminated employees?

Accepted Answer

A) ADEA 
B) ERISA 
C) COBRA 
D) OSHA

Question 13

Companies may use and to allow employees to have secure, rapid access to their compensation.

Accepted Answer

A) Cash; Checks 
B) Cash; Direct Deposit 
C) Paycards; Checks 
D) Direct Deposit; Paycards

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

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?

Accepted Answer

A) Integrity 
B) Objectivity and Independence 
C) Responsibilities 
D) Professionalism

Question 16

The largest challenge to companies that use manual payroll processing is:

Accepted Answer

A) Filing appropriate governmental reports. 
B) Maintaining accurate personnel records. 
C) Obtaining accurate employee data. 
D) Integrating current tax tables.

Question 17

Which court case updated the deﬁnition of spouse to include same-sex unions?

Accepted Answer

A) Obergefell v. Hodges. 
B) CIGNA v. Amara. 
C) Young v. Wackenhut. 
D) Pollard v. DuPont.

Question 18

Contemporary payroll practices reﬂect:

Accepted Answer

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

Question 19

The Fair Labor Standards Act contains provisions for:

Accepted Answer

A) Full-time workers, part-time workers, and independent contractors. 
B) Pay periods, paid time off, and minimum wage. 
C) Overtime pay, minimum wage, and working conditions. 
D) Minimum wage, maximum wage, and overtime pay.

Question 20

Positive aspects of the use of Internet-based accounting software includes which of the following?

Accepted Answer

A) Suitability for highly complex large businesses. 
B) Continual updates for tax rate and other changes. 
C) Unlimited options for company personnel. 
D) Fixed software layout for consistency among companies.

Exam 1: The Need for Payroll and Personnel Records