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CPP Practice Exam 1

25 Questions
CPP Quizzes & Trivia

This is a practice quiz to help you prepare for the Certified Payroll Professional certification. The quiz is based on a bank of 25 multiple choice questions that reveal the correct answer before you move on to the next question. The questions and their associated answers are randomized every time you take the quiz to avoid pattern development. Questions requiring calculations that change from year to year have been omitted. Good luck as you pursue this goal. I hope this helps you prepare. Inspired by my lovely wife as she pursued this goal as well.

Questions and Answers
  • 1. 
    • A. 

      $620

    • B. 

      $496

    • C. 

      $310

    • D. 

      $0

  • 2. 
    • A. 

      Box 12 only

    • B. 

      Boxes 1 ,3, 5, and 12

    • C. 

      Box 1 only

    • D. 

      Boxes 1, 3, and 5

  • 3. 
    Technology that allows multiple PC's in different geographical areas to access a single device, such as  a check printer is:
    • A. 

      Surge protection

    • B. 

      Regression testing

    • C. 

      Transaction processing

    • D. 

      Wide area network

  • 4. 
    Who of the following most likely is an independant contractor?
    • A. 

      A retiree called back to work on a temporary basis

    • B. 

      A person normally employed in the mail room who comes in after hours to clean the offices.

    • C. 

      A repairman who is called periodically to perform maintenance on the PC's of a dental office.

    • D. 

      A commissioned salesman who works from his home.

  • 5. 
    The Fair Labor Standards Act specifically governs which of the following?
    • A. 

      When severance pay must be paid

    • B. 

      How vacation pay is accrued

    • C. 

      Record keeping requirements

    • D. 

      When holiday pay must be provided

  • 6. 
    An envrionment n which the back office transaction-intensive proceses and customer care function are consolidated is known as:
    • A. 

      Outsourcing

    • B. 

      Pre-processing

    • C. 

      Open systems

    • D. 

      Shared services

  • 7. 
    Nice Guys Inc. has a short-term disablity plan, provided by a third-party insurance company, for its factory workers.  Employees do not pay for this benefit.  Roberta received $400 a month for four months during the six-month coverage period.  How did the third-party payer tax Roberta's disability payments?
    • A. 

      No tax was withheld on any payments

    • B. 

      Social Security and Medicare taxes were withheld on $400 in each of the four months.

    • C. 

      Federal Income tax was withheld on $400 in each of the four months

    • D. 

      Social Security and Medicare taxes were withheld on the value of the premium paid by the employer

  • 8. 
    Which fo the following does nto meet the federal definition of supplemental wages?
    • A. 

      Commissions

    • B. 

      Certain stock awards

    • C. 

      Paid sick leave

    • D. 

      Holiday pay

  • 9. 
    • A. 

      Accountability

    • B. 

      Authority

    • C. 

      Responsibility

    • D. 

      Ability

  • 10. 
    Which of the following is an example of a system production control technique?
    • A. 

      External auditors verify payroll account balances prior to commenting on financial statements

    • B. 

      Cut-off dates for data entry are established with remote users

    • C. 

      Payroll department members change their passwords each week

    • D. 

      Check stock is maintained under lock and key

  • 11. 
    If an employee working abroad with a tax home in a foriegn country passes the "physical presence test," to what may the employee be eligible?
    • A. 

      Income exclusions

    • B. 

      Employer-paid housing expenses

    • C. 

      Foreign service premium

    • D. 

      Hardship allowance

  • 12. 
    • A. 

      Salespeople who work out of their homes

    • B. 

      High school students who work over 8 hours in a day

    • C. 

      Municipal firefighters

    • D. 

      Retirees who return for part-time work

  • 13. 
    The FLSA requires which of the following records to be retained for three years?
    • A. 

      Daily time records

    • B. 

      Proof of workers' compensation coverage

    • C. 

      Employee disciplinary notices

    • D. 

      Document showing employee's job duties

  • 14. 
    Which of the following employers are exempt from the provisions of IRCA?
    • A. 

      Employers with annual revenues under $10,000

    • B. 

      Employers with less than 2 employees

    • C. 

      All employers are subject to compliance

    • D. 

      Privately held employers

  • 15. 
    In maintaining a payroll system, change control refers to:
    • A. 

      Entering new data to an employee's record

    • B. 

      Procedures to test and schedule changes before they are put into production

    • C. 

      Creating a new system in a merger or acquisition

    • D. 

      Separation of functions according to accounting standards

  • 16. 
    What document reflects the value of the assets of a corporation?
    • A. 

      Profit/loss statement

    • B. 

      Income statement

    • C. 

      Balance sheet

    • D. 

      Variance analysis

  • 17. 
    • A. 

      Overtime is paid at double time for work performed on Sundays

    • B. 

      Employees may take unused vacation from the current year in the first quarter of the subsequent year

    • C. 

      Time cards are filed by the cost center in the records room

    • D. 

      Employees receive their hourly rate of pay for hours spent in jury service

  • 18. 
    Use of which of the following contributes to the security of the payroll system?
    • A. 

      Accountable plan

    • B. 

      Diplomatic leadership

    • C. 

      User password

    • D. 

      Direct deposit

  • 19. 
    • A. 

      Cafeteria plans

    • B. 

      401(k) plans

    • C. 

      Transportation fringe benefits

    • D. 

      Athletic facilities

  • 20. 
    A salaried-exempt executive employee is unable to work for two days in the work week because the office is closed for remodeling.  The employee's weekly guaranteed salary is $500.  Under FLSA what amount must this employee be paid for he work week?
    • A. 

      $500

    • B. 

      $300

    • C. 

      $400

    • D. 

      $200

  • 21. 
    • A. 

      Debit cash, credit EIC payable

    • B. 

      Debit EIC payable, credit cash

    • C. 

      Debit FIT payable, credit cash

    • D. 

      Debit EIC payable, credit FICA payable

  • 22. 
    At the time that wages are paid, an advance payment of EIC would be recorded as:
    • A. 

      Debit cash, credit EIC payable

    • B. 

      Debit EIC payable, credit cash

    • C. 

      Debit FIT payable, credit cash

    • D. 

      Debit EIC payable, credit FICA payable

  • 23. 
    A single company of a group of related companies can file the Forms W-2 and 941 under it's EIN for all employees of all the related companies, whether or not the employees are concurrently employed, under which of the following reporting options?
    • A. 

      Common paymaster

    • B. 

      Power of attorney

    • C. 

      Reporting agent

    • D. 

      Establishment reporting

  • 24. 
    How many hours prior to payday is it recommended that a direct deposit of wages be initiated with the ODFI?
    • A. 

      24 hours

    • B. 

      72 hours

    • C. 

      8 hours

    • D. 

      48 hours

  • 25. 
    Under the existing NACHA rules, amounts transmitted to the RDFI by 5:00 p.m. the day before payday must be posted to employees' accounts no later than:
    • A. 

      The end of the business day on payday

    • B. 

      The opening of the business day on payday

    • C. 

      The evening before payday

    • D. 

      Two days before payday