Question 1

Which aspect of internal controls for payroll relates to the Sarbanes-Oxley Act?

Accepted Answer

A)   Protecting employee retirement funds
B)   Limiting the number of employees authorized to disburse payroll
C)   Cross-training employees and altering duties
D)   Ensuring the complexity of the audit trail

Question 2

Why is it important for an employer to classify a worker as either an employee or an independent contractor?

Accepted Answer

A)   For tax reporting purposes
B)   For child support obligations purposes
C)   For government tracking purposes
D)   For reimbursement purposes

Question 3

Stan works for a bakery for which part of his compensation is based on the decoration of wedding and other specialty cakes.His compensation has a ____________ element.

Accepted Answer

A)   Performance incentive
B)   Commission
C)   Piece-rate
D)   Nonexempt

Question 4

Which of the following factors assist employers in determining employee pay rates (Select all that apply) ?

Accepted Answer

A)   Employee skill
B)   Company location
C)   Employee age
D)   Industry benchmarks

Question 5

Josh,who is 21 years of age,is a new employee of XYZ Company.To establish his identity and
Employment authorization,he could present:

Accepted Answer

A)   His current United States passport.
B)   His library card and birth certificate.
C)   His driver's license and ATM card.
D)   His college transcript and driver's license.

Question 6

When developing the internal controls and record retention for a payroll system,a company should:

Accepted Answer

A)   Involve all company employees to promote transparency.
B)   Develop a closed system and alternate employee duties.
C)   Designate a single employee with the responsibility for pay disbursements.
D)   Train accounting personnel on a single payroll task.

Question 7

Which of the following is a necessary element in an accounting system (Select all that apply) ?

Accepted Answer

A)   Internal review
B)   Audit control
C)   Internal control
D)   Audit review

Question 8

Foreign workers in the United States are subject to new hire reporting regulations.

Accepted Answer

A) True 
 B)False

Question 9

Allen is an employee of the foreign subsidiary of a United States based company who lives and work in the United Kingdom.According to FATCA,how much of his wages may Allen exclude from United States' taxes,according to 2016 guidelines?

Accepted Answer

A)   $46,500
B)   $79,850
C)   $101,300

Question 10

U.S.workers in foreign subsidiaries are exempt from all income taxes.

Accepted Answer

A) True 
 B)False

Question 11

Why must pay period information be a part of an employee's payroll file?

Accepted Answer

A)   As a means of tracking time worked for overtime compensation purposes.
B)   To ensure that the employee receives all compensation earned.
C)   As a means of ensuring pay equality among employees.
D)   To document satisfaction of court-ordered obligations.

Question 12

Individuals classified as _________________________________ are processed as vendors of a firm.

Accepted Answer

A)   Exempt employees.
B)   Nonexempt employees.
C)   Government contract employees.
D)   Independent contractors.

Question 13

_______________ payroll is processed every two weeks and will usually result in a lower gross pay per pay period than ________________ payroll.

Accepted Answer

A)   Weekly;monthly.
B)   Semimonthly;biweekly.
C)   Biweekly;semimonthly.
D)   Daily;biweekly.

Question 14

A firm needs to destroy paper payroll records after the end of the retention period.Which of the following is an option for destruction purposes (Select all that apply) ?

Accepted Answer

A)   Shredding
B)   Discarding
C)   Pulping
D)   Burning

Question 15

What is the difference between termination and resignation,as far as final pay is concerned?

Accepted Answer

A)   Resignation pay may be paid at the next regular pay date,but termination pay is subject to state law.
B)   Resignation and termination pay are subject to state regulations.
C)   Resignation pay must be paid within one week and termination pay must be the next business day.
D)  Resignation pay must be paid on the next business day and termination pay is due immediately.

Question 16

An employer must have an employee complete Form W-4:

Accepted Answer

A)   Before each pay disbursement.
B)   Each year,upon the employee's anniversary with the firm.
C)   Every January 1.
D)   At the time of hire.

Question 17

What types of records does IRS Regulation 26 CFR 1.6001 cover (Select all that apply) ?

Accepted Answer

A)   Manual pay records
B)   Computerized pay records
C)   Outsourced payroll records
D)   Independent contractor remittance

Question 18

FATCA enforcement has been difficult because the Internal Revenue Service relies on _________________ for reporting purposes.

Accepted Answer

A)   Intermediaries (e.g. ,banks) 
B)   Employers and employees
C)   Foreign countries
D)   Personal income tax returns

Question 19

A company should assign _________________ employee(s) the responsibility for signing payroll checks and disbursements.

Accepted Answer

A)   A limited number of
B)   Only one
C)   Its most responsible
D)   None of the

Question 20

Upon termination from a firm,employer must disburse the former employee's final pay ___________.

Accepted Answer

A)   Immediately.
B)   Within 24 hours.
C)   At the next scheduled payday.
D)   In accordance with state law.

Exam 2: Payroll System Procedures

Josh,who is 21 years of age,is a new employee of XYZ Company.To establish his identity and Employment authorization,he could present:

Correct AnswerverifiedShow Answer

Which aspect of internal controls for payroll relates to the Sarbanes-Oxley Act?

Correct AnswerverifiedShow Answer

U.S.workers in foreign subsidiaries are exempt from all income taxes.

Correct AnswerverifiedShow Answer

An employer must have an employee complete Form W-4:

Correct AnswerverifiedShow Answer

_______________ payroll is processed every two weeks and will usually result in a lower gross pay per pay period than ________________ payroll.

Correct AnswerverifiedShow Answer

Individuals classified as _________________________________ are processed as vendors of a firm.

Correct AnswerverifiedShow Answer

Upon termination from a firm,employer must disburse the former employee's final pay ___________.

Correct AnswerverifiedShow Answer

What types of records does IRS Regulation 26 CFR 1.6001 cover (Select all that apply) ?

Correct AnswerverifiedShow Answer

Why must pay period information be a part of an employee's payroll file?

Correct AnswerverifiedShow Answer

When developing the internal controls and record retention for a payroll system,a company should:

Correct AnswerverifiedShow Answer

What is the difference between termination and resignation,as far as final pay is concerned?

Correct AnswerverifiedShow Answer

A firm needs to destroy paper payroll records after the end of the retention period.Which of the following is an option for destruction purposes (Select all that apply) ?

Correct AnswerverifiedShow Answer

FATCA enforcement has been difficult because the Internal Revenue Service relies on _________________ for reporting purposes.

Correct AnswerverifiedShow Answer

Which of the following factors assist employers in determining employee pay rates (Select all that apply) ?

Correct AnswerverifiedShow Answer

Why is it important for an employer to classify a worker as either an employee or an independent contractor?

Correct AnswerverifiedShow Answer

Stan works for a bakery for which part of his compensation is based on the decoration of wedding and other specialty cakes.His compensation has a ____________ element.

Correct AnswerverifiedShow Answer

A company should assign _________________ employee(s) the responsibility for signing payroll checks and disbursements.

Correct AnswerverifiedShow Answer

Foreign workers in the United States are subject to new hire reporting regulations.

Correct AnswerverifiedShow Answer

Which of the following is a necessary element in an accounting system (Select all that apply) ?

Correct AnswerverifiedShow Answer

Allen is an employee of the foreign subsidiary of a United States based company who lives and work in the United Kingdom.According to FATCA,how much of his wages may Allen exclude from United States' taxes,according to 2016 guidelines?

Correct AnswerverifiedShow Answer

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_ payroll is processed every two weeks and will usually result in a lower gross pay per pay period than __ payroll.

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