CPP Practice Exam 12

25 Questions  I  By V091200
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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 yo more

  
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  • 1. 
    The Family and Medical Leave Act requires employers to maintain records for:
    • A. 

      12 weeks

    • B. 

      1 year

    • C. 

      2 years

    • D. 

      3 years


  • 2. 
    A request for proposal (RFP) can be used to:
    • A. 

      Provide vendors with technical and functional system requirements

    • B. 

      Request funds during a budget process

    • C. 

      Analyze needs for a system

    • D. 

      Assign programming resources to enhance functionality


  • 3. 
    Using the 2010 percentage method withholding tables, calculate the employee's federal income tax based on the following data: Weekly pay frequency Vacation earnings:  $360.62 Regular compensation:  $239.38 401(k) (pre-tax):  $48.50 Married, 0 allowances  
    • A. 

      $32.78

    • B. 

      $40.05

    • C. 

      $61.13

    • D. 

      $44.28


  • 4. 
    An employee is paid $9 per hour plus a 10% differential for evening shifts.  During the past week, the employee worked 24 hours on the day shift and 24 hours on the evening shift.  Under FLSA, what are the employee's gross wages for the week?
    • A. 

      $378.00

    • B. 

      $432.00

    • C. 

      $439.20

    • D. 

      $491.44


  • 5. 
    A nonexempt employee earns $400 per week for a normal schedule of 35 hours.  Under FLSA, how mjuch would this employee be due if 48 hours were worked?
    • A. 

      $400.00

    • B. 

      $594.40

    • C. 

      $548.64

    • D. 

      $433.32


  • 6. 
    How may federal income tax be withheld from separation pay and accrued vacation wages totaling $20,000 that are paid at the time of termination and identified separately on the employees' pay stub, if the employee has been paid $25,000 so far this year and had income tax withheld from her most recent wage payment?
    • A. 

      Using the aggregated method only

    • B. 

      Using the prior 12 months' tax rate

    • C. 

      At the optional flat rate for all payouts at termination only

    • D. 

      At the optional flat rate or using the aggregate method


  • 7. 
    A payroll register for the pay period shows gross earnings of $300,000 and deductions of $120,000.  The entry to the payroll expense account would be:
    • A. 

      $120,000

    • B. 

      $180,000

    • C. 

      $300,000

    • D. 

      $420,000


  • 8. 
    Payroll system user documentation should include:
    • A. 

      A copy of the RFP

    • B. 

      Copies of project development documents

    • C. 

      Details of disaster recovery procedures

    • D. 

      The history of the payroll system conversion


  • 9. 
    When checking for phantom employees, which of the following actions should be taken?
    • A. 

      Notify the employees of an impending physical payout

    • B. 

      Have the managers hand checks out to their employees

    • C. 

      Have employees pick up checks and direct deposit advices and show identification

    • D. 

      Mail checks directly to employee's homes


  • 10. 
    An employee is to be awarded a net bonus of $2,000 as supplemental wages.  Year-to-date regular and supplemental earnings are $15,000.  Using the current optional flat tax rate and social security and Medicare tax rates, what should be the gross amount of the payment if the employee lives and works in a state with no income tax?
    • A. 

      $3,060.44

    • B. 

      $2,666.67

    • C. 

      $3,108.00

    • D. 

      $2,969.56


  • 11. 
    Which form is used to request an employer identification number?
    • A. 

      I-9

    • B. 

      SS-4

    • C. 

      SS-5

    • D. 

      SS-8


  • 12. 
    One element of a payroll calander is:
    • A. 

      Pay frequency

    • B. 

      Hire dates

    • C. 

      Total remuneration

    • D. 

      Social security numbers


  • 13. 
    With online input, what is the BEST way to control miscellaneous payments?
    • A. 

      Verification of a sample of entered data

    • B. 

      A visual audit of the online activity report

    • C. 

      An auditor's comparison of each input source document to the database record

    • D. 

      A comparison of the online report totals to predetermined totals taken from the source documents


  • 14. 
    All of the following actions demonstrate a strong customer service orientation EXCEPT:
    • A. 

      Exhibiting a customer friendly attitude

    • B. 

      Viewing customers as the most important part of the job

    • C. 

      Using voice mail to answer phone calls from customers

    • D. 

      Establishing relationships with people


  • 15. 
    Employer-sponsored athletic facilities may not be nontaxable fringe benefits if the:
    • A. 

      Employer requires substantiation of the amount, time, and business purpose of the facility's use.

    • B. 

      Employer incurs no substantial additional cost, except labor, to provide the facility

    • C. 

      Facility is on the employer's premises

    • D. 

      Facility qualifies as a de minimus fringe


  • 16. 
    When an employer is advised  by the IRS that an employee's Form W-4 is invalid, what action must the employer take?
    • A. 

      All further Forms W-4 must be sent to the IRS as long as the employee is being paid

    • B. 

      Employers have no obligation to change exemptions unless notified by the employee through a new Form W-4

    • C. 

      Withhold on the basis of information provided by the IRS

    • D. 

      The employer should send notice at the end of the quarter, requesting that the employee contact the IRS to clear up the problem


  • 17. 
    A team comprised of members of a department's staff with the intention of improving their own process is a:
    • A. 

      Cross-functional team

    • B. 

      Conversion team

    • C. 

      Functional team

    • D. 

      Management team


  • 18. 
    An employee who works for more than one employer and has exceeded the social security wage base may:
    • A. 

      Take a credit against federal income tax on Form 1040

    • B. 

      Demand that the employer refund the overage

    • C. 

      Apply the social security tax to next year's withholdings

    • D. 

      Apply the overage to benefits paid at age 65


  • 19. 
    When determining the value of employer-provided parking, which of the following valuation methods is allowed?
    • A. 

      Employer's cost

    • B. 

      Employee's cost

    • C. 

      Lower of employee's cost or fair market value

    • D. 

      Employee's fair market value


  • 20. 
    What is the purpose of the payroll accrual entry?
    • A. 

      To recognize expenses in the period in which they were incurred

    • B. 

      To reverse an entry made in error

    • C. 

      To recognize expenses in the period in which they were paid

    • D. 

      To reverse an entry from a previous period


  • 21. 
    Which of the following steps is LEAST important during the parallel testing phase of a new payroll system?
    • A. 

      The testing of employee earnings and deductions accuracy

    • B. 

      The verification of employees transferred to the new system from the old system

    • C. 

      The verification of tax withholding calculations for employees

    • D. 

      Testing the functionality of a wage attachment process


  • 22. 
    All of the following practices are acceptable to an external auditor EXCEPT:
    • A. 

      The accounting department reconciling the payroll checking account

    • B. 

      The payroll supervisor verifying that deposits are made timely

    • C. 

      Storage of blank payroll checks in the payroll department

    • D. 

      The treasury department being responsible for the signature of payroll checks


  • 23. 
    All of the following types of compensation are subject to social security tax EXCEPT:
    • A. 

      Tips under $100

    • B. 

      Deferred bonus

    • C. 

      Third-party sick pay up to $3,000

    • D. 

      Workers' compensation pay


  • 24. 
    Which of the following outcomes is the PRIMARY advantage of developing an in-house system?
    • A. 

      Outsiders are not involved in a firm's daily operations

    • B. 

      Costs are reduced and can be distributed on an equitable basis

    • C. 

      The employer controls the entire computer system

    • D. 

      Time is saved by having to explain business policies and practices


  • 25. 
    An employee covered by group health insurance at the time his employment terminates to return to school is entitled to CORBA continuation rights for:
    • A. 

      12 months

    • B. 

      18 months

    • C. 

      24 months

    • D. 

      30 months


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