Question 1

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. B

Question 2

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?

Accepted Answer

A)   Responsibilities
B)   Public Interest
C)   Objectivity and Independence
D)   Integrity D

Question 3

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. B

Question 4

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 5

Why is outsourced payroll popular among accounting professionals?

Accepted Answer

A)   Ease of use.
B)   Data accuracy.
C)   Time reduction.
D)   Records retention.

Question 6

Jeremiah is a salaried exempt worker whose standard workday consists of eight-hour shifts.During a workweek,he exceeded eight hours of work on two separate days.What is the FLSA provision for the time that he worked past eight hours in a single day?

Accepted Answer

A)   He must be compensated at overtime rates for any hours past eight in a single day.
B)   He must reduce the time he works on subsequent days.
C)   He must alert his manager of the extra time on the next business day.
D)   He will receive no additional compensation for the extra time worked.

Question 7

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?

Accepted Answer

A)   He is required to be absent during the audit to avoid influencing the results.
B)   He must agree to serve on the audit staff for other companies.
C)   He must be available to answer questions and grant access to payroll records.
D)   He must prevent privacy breaches by disallowing access to payroll records.

Question 8

According to the Fair Labor Standards Act,nonexempt workers receive overtime for:

Accepted Answer

A)   Hours worked in excess of 8 per day and 30 per week.
B)   Hours worked in excess of 40 per week.
C)   Hours worked in excess of 9 per day or 35 per week.
D)   Hours worked in excess of employer-determined rules.

Question 9

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

Accepted Answer

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

Question 10

Which of the following represents a payroll system privacy breach by Susan,a payroll accountant?

Accepted Answer

A)   Susan shares information about labor costs with company executives.
B)   Susan alerts department managers about potential FLSA violations in their departments.
C)   Susan discusses specific information about the company's federal contracts with friends during lunch.
D)   Susan places employee payroll files in a cabinet to which only she and her supervisor have access.

Question 11

The Current Tax Payment Act changed employer remittance of taxes by:

Accepted Answer

A)   Instituting the mandatory transfer of payroll tax liabilities.
B)   Legislating the amounts of tax withheld from each employee.
C)   Requiring employers to remit taxes during the year based on estimated liabilities.
D)   Calling for employers to remit only the current portions of taxes due.

Question 12

Congress passed the __________________ and _________________ to assist displaced workers.

Accepted Answer

A)   16th Amendment; Fair Labor Standards Act.
B)   Social Security Act; Medicare Act.
C)   Federal Unemployment Tax Act; Social Security Insurance Act.
D)   Federal Income Contributions Act; Federal Unemployment Tax Act.

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

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

Accepted Answer

A)   The use of current tax tables.
B)   Obtaining accurate employee data.
C)   Maintaining accurate payroll records.
D)   Filing appropriate governmental reports.

Question 15

Worker's compensation insurance premiums:

Accepted Answer

A)   Are the same amount for all employees of a company, regardless of employee task.
B)   Are remitted in full at the end of the year to ensure accuracy.
C)   Are mandated by the Fair Labor Standards Act.
D)   Are governed by state laws and vary according to worker job classification.

Question 16

Which of the following is not an option available to payroll accountants?

Accepted Answer

A)   Payroll preparation through electronic accounting software.
B)   Reduced responsibility for accuracy because of outsourcing services.
C)   Increased use of paycards as a vehicle for paying employees.
D)   Governmentally developed charts to streamline the payroll process.

Question 17

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 adjusted based on their disability.

Question 18

Which of the following is true about independent contractors?

Accepted Answer

A)   They receive more company benefits than other workers.
B)   They are not subject to any provisions of payroll laws.
C)   They may not work any overtime hours.
D)   They must provide proof of employment insurance before commencing work.

Question 19

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 employee's paychecks cannot be issued without his presence.Which ethical principle most closely governs this situation?

Accepted Answer

A)   Responsibilities
B)   Objectivity and Independence
C)   Integrity
D)   Public Interest

Question 20

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?

Accepted Answer

A)   Objectivity
B)   Due Care
C)   Responsibilities
D)   Public Interest

Exam 1: Payroll Practices and System Functions