Question 1

Best practices for paying employees by check include which of the following (Select all that apply)?

Accepted Answer

A)  Maintenance of a separate checking account for payroll purposes. 
B)  Keeping a single check register for the firm's checking accounts. 
C)  Logging the number,amount,and purpose of each check used. 
D)  Establishing an unclaimed property account for uncashed checks.

Question 2

What is a disadvantage to using paycards as a method of transmitting employee compensation?

Accepted Answer

A)  Convenience of retrieving pay disbursements. 
B)  Potential withdrawal and point-of-sale limitations. 
C)  Ease of paying traveling employees. 
D)  Acceptance of paycards at many locations.

Question 3

Paolo is a part-time security guard for a local facility.He earned $298.50 during the most recent weekly pay period and has earned $5,296.00 year-to-date.He is married with four withholding allowances.What is his Medicare tax liability for the pay period?

Accepted Answer

A)  $43.23 
B)  $10.54 
C)  $8.65 
D)  $4.33

Question 4

Amanda is a full-time exempt employee in Sparks,Nevada,who earns $84,000 annually.She is married with 1 deduction and is paid biweekly.She contributes $150.00 per pay period to her 401(k)and has pre-tax health insurance and AFLAC deductions of $50.00 and $75.00,respectively.Amanda contributes $25.00 per pay period to the United Way.What is her net pay? (Use the percentage method.Do not round intermediate calculations.Round final answers to 2 decimal places. )

Accepted Answer

A)  $2,358.18 
B)  $2,193.60 
C)  $2,316.93 
D)  $2,205.44

Question 5

Danny is a full-time exempt employee in Alabama,where the state income tax rate is 5%.He earns $78,650 annually and is paid semimonthly.He is married with four withholding allowances.His is health insurance is $100.00 per pay period and is deducted on a pre-tax basis.Danny contributes 5% of his pay to his 401(k).Assuming that he has no other deductions,what is Danny's net pay for the period? (Use the percentage method for the federal income tax and the wage-bracket table for the state income tax.Do not round interim calculations,only round final answer to two decimal points. )

Accepted Answer

A)  $2,245.53 
B)  $2,403.95 
C)  $2,360.87 
D)  $2,178.90

Question 6

According to the Consumer Credit Protection Act,what is the maximum percentage of an employee's disposable earnings that may be withheld as part of a consumer credit garnishment?

Accepted Answer

A)  25% 
B)  35% 
C)  50% 
D)  40%

Question 7

Julian is a part-time employee in Nashville,Tennessee,who earns $21.50 per hour.During the last biweekly pay period he worked 45 hours.He is single with one withholding allowance (use the wage-bracket table).What is his net pay? (Do not round interim calculations,only round final answer to two decimal points. )

Accepted Answer

A)  $818.40 
B)  $797.18 
C)  $825.99 
D)  $802.49

Question 8

Adam is a part-time employee who earned $495.00 during the most recent pay period.He is married with two withholding allowances.Prior to this pay period,his year-to-date pay is $6,492.39.How much should be withheld from Adam's gross pay for Social Security tax?

Accepted Answer

A)  $40.02 
B)  $30.69 
C)  $37.92 
D)  $28.46

Question 9

Which of the following may be included as part of an employee's Section 125 "cafeteria" plan?

Accepted Answer

A)  Medical expenses 
B)  Tuition expenses 
C)  Meal expenses 
D)  Moving expenses

Question 10

Federal income tax,Medicare tax,and Social Security tax amounts withheld from employee pay are matched by amounts paid by the employer.

Accepted Answer

A) True 
 B)False

Question 11

Natalia is a full-time exempt employee who earns $215,000 annually,paid monthly.Her year-to-date pay as of November 30 is $197,083.30.How much will be withheld from Natalia for FICA taxes for the December 31 pay date? (Social Security maximum wage is $118,500.Do not round interim calculations,only round final answer to two decimal points. )

Accepted Answer

A)  $292.04 
B)  $394.79 
C)  $1,370.63 
D)  $421.04

Question 12

Social Security tax has a wage base,which is the minimum amount an employee must earn before they will have the Social Security tax deduction.

Accepted Answer

A) True 
 B)False

Question 13

The annual payroll tax guide that the IRS distributes is called __________________.

Accepted Answer

A)  The IRS tax guide 
B)  Publication E 
C)  Circular 15 
D)  Publication 15

Question 14

Caroljane earned $1,120 during the most recent pay biweekly pay period.She contributes 4% of her gross pay to her 401(k)plan.She is single and has 1 withholding allowance.Based on the following table,how much federal income tax should be withheld from her pay?

Accepted Answer

A)  $115.00 
B)  $109.00 
C)  $112.00 
D)  $106.00

Question 15

Wyatt is a full-time exempt music engineer who earns $130,000 annually and is paid semimonthly.As of November 15,his year-to-date gross pay was $113,750.07.How much will be withheld for FICA taxes for the November 30 pay date? (Social Security maximum wage is $118,500.Do not round interim calculations,only round final answer to two decimal points. )

Accepted Answer

A)  $335.83 
B)  $414.37 
C)  $212.88 
D)  $373.04

Question 16

Why do employers use checks as an employment payment method?

Accepted Answer

A)  Paying employees by check allows the employer flexibility with its bank accounts. 
B)  Paying employees by check increases the complexity of the payroll process. 
C)  Paying employees by check requires the employer to keep currency on the premises. 
D)  Paying employees by check offers a level of security of employee payments.

Question 17

Jeannie is an adjunct faculty at a local college,where she earned $680.00 during the most recent semimonthly pay period.Her prior year-to-date pay is $18,540.She is single and has one withholding allowance.What is her Social Security tax for the pay period?

Accepted Answer

A)  $48.02 
B)  $39.24 
C)  $44.18 
D)  $42.16

Question 18

Why might an employee elect to have additional federal income tax withheld (Select all that apply)?

Accepted Answer

A)  The employee has more than one job. 
B)  The employee's spouse is employed. 
C)  The employee wishes to reduce income tax liability. 
D)  The employee wants to satisfy prior years' tax obligations.

Question 19

Maile is a full-time exempt employee in Boca Raton,Florida,who earns $1,370.15 per biweekly payday.She is married with seven withholding allowances,so her federal income tax is $0.She contributes 4% of her gross pay to her 401(k)and has her health insurance premium of $50 deducted on a pre-tax basis.She has $10 deducted per pay period for a Salvation Army contribution and has union dues of $40 per pay period.What is her net pay? (Do not round interim calculations,only round final answer to two decimal points. )

Accepted Answer

A)  $1,160.53 
B)  $1,114.35 
C)  $1,124.23 
D)  $1,137.93

Question 20

Which of the following best describes a SEP?

Accepted Answer

A)  The employer or employee establishes and employer contributes to a tax-favorable IRA. 
B)  The employer establishes a tax-favorable IRA for the employee. 
C)  The employee rolls over an existing IRA to his or her employer and the current employer continues contributions. 
D)  The employer creates a taxable IRA to which the employee must make a defined contribution.

Exam 4: Employee Net Pay and Pay Methods

Best practices for paying employees by check include which of the following (Select all that apply) ?