CPP Practice Exam Quiz 1

The correct answer is $500. According to the FLSA (Fair Labor Standards Act), exempt employees must be paid their full salary for any workweek in which they perform any work, regardless of the number of hours worked. In this case, even though the employee was unable to work for two days due to office remodeling, they are still entitled to their full weekly salary of $500.

A wide area network (WAN) is a technology that enables multiple PCs in different geographical areas to access a single device, such as a check printer. A WAN connects multiple local area networks (LANs) over a large geographical area, allowing for the sharing of resources and data between different locations. In this case, the WAN would allow PCs in different areas to connect to the check printer and send print jobs to it remotely.

A user password contributes to the security of the payroll system by providing a level of authentication and access control. It ensures that only authorized individuals can access the system and make changes to payroll information. By requiring users to enter a unique password, it helps to prevent unauthorized access, data breaches, and potential fraud. This helps to protect sensitive payroll data and maintain the integrity and confidentiality of the system.

Shared services refers to a business model where back office transaction-intensive processes and customer care functions are consolidated into one central unit. This allows for increased efficiency, cost savings, and improved quality of service. By sharing resources and standardizing processes, organizations can streamline operations and provide better support to both internal and external customers. This model is commonly used in industries such as finance, human resources, IT, and procurement.

The Fair Labor Standards Act (FLSA) specifically governs record keeping requirements. This means that employers are required to keep accurate records of their employees' wages, hours worked, and other important information. This is important for ensuring that employees are being paid correctly and for enforcing other provisions of the FLSA, such as minimum wage and overtime requirements. The FLSA does not specifically address severance pay, vacation pay, or holiday pay, although it may have some implications for these areas indirectly.

An independent contractor is someone who is not an employee but provides services to a client or company on a temporary or project basis. In this scenario, the repairman fits this description as he is called periodically to perform maintenance on the PC's of a dental office. Unlike the retiree who is called back to work temporarily, the person employed in the mail room who cleans the offices after hours, and the commissioned salesman who works from home, the repairman is not a regular employee and is hired specifically for a particular task or service.

The statement "Time cards are filed by the cost center in the records room" is an example of a procedure because it describes a specific action or process that is followed in the organization. It outlines how time cards are handled and where they are filed, indicating a step-by-step approach to managing this task. This statement demonstrates a clear and defined procedure within the workplace.

The Fair Labor Standards Act permits compensatory time off in lieu of overtime pay to municipal firefighters. This means that instead of receiving overtime pay for working more than the standard hours, firefighters can accumulate additional time off that can be used at a later date. This is allowed because firefighters often work irregular schedules and may be required to work longer hours during emergencies.

A balance sheet reflects the value of the assets of a corporation. It provides a snapshot of a company's financial position at a specific point in time, showing the company's assets, liabilities, and shareholders' equity. It is an important financial statement that helps investors, creditors, and other stakeholders assess the financial health and stability of a company. The balance sheet includes various categories of assets, such as cash, accounts receivable, inventory, property, and equipment, which collectively represent the value of the company's resources.

Change control in maintaining a payroll system refers to the procedures that are followed to test and schedule changes before they are implemented or put into production. This ensures that any changes made to the system, such as updates or modifications, are thoroughly tested and verified before being applied to the live environment. By following change control procedures, the risk of introducing errors or disruptions to the payroll system is minimized, ensuring the system remains accurate and reliable.

When initiating a direct deposit of wages with the ODFI (Originating Depository Financial Institution), it is recommended to do so 48 hours prior to payday. This allows enough time for the ODFI to process the transaction and ensure that the funds are deposited into the recipient's account before payday. Initiating the direct deposit 48 hours in advance helps to avoid any delays or issues that may arise during the processing of the transaction.

The correct answer is "All employers are subject to compliance." This means that none of the employers listed in the options are exempt from the provisions of IRCA. Regardless of their annual revenues or the number of employees, all employers are required to comply with the provisions of IRCA.

If an employee working abroad with a tax home in a foreign country passes the "physical presence test," they may be eligible for income exclusions. This means that they may be able to exclude a certain amount of their foreign earned income from their taxable income in the United States. This can help reduce their overall tax liability.

The third-party payer withheld Social Security and Medicare taxes on $400 in each of the four months because disability payments are subject to these taxes.

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 the opening of the business day on payday. This means that the funds should be available in the employees' accounts at the start of the business day on payday, allowing them to access their money as soon as possible.

Accountability is not delegated to others because it is the obligation to take responsibility for one's actions and decisions. It cannot be transferred or assigned to someone else. While authority, responsibility, and ability can be delegated to others, accountability remains with the individual who is ultimately responsible for the outcome or consequences of their actions.

Holiday pay does not meet the federal definition of supplemental wages because it is not considered an additional payment for work performed or services rendered. Supplemental wages are typically payments made to employees that are not regular wages, such as bonuses, commissions, or stock awards. Holiday pay, on the other hand, is a form of regular wages that is paid to employees for time not worked during designated holidays.

The reimbursement for substantiated meal expenses should be reported on Cindy's 2009 federal W-2 in Boxes 1, 3, and 5. Box 1 reports the wages, tips, and other compensation, which includes the reimbursement amount. Box 3 reports the Social Security wages, which also includes the reimbursement. Box 5 reports the Medicare wages, which includes the reimbursement as well. This ensures that the reimbursement is properly accounted for and reported for tax purposes.

When an advance payment of Earned Income Credit (EIC) is made, it is recorded as a liability called EIC payable. This liability represents the amount that the company owes to the employee as an advance on their EIC. Since cash is being paid out, it is debited, and since the EIC payable liability is being increased, it is credited. Therefore, the correct entry would be to debit EIC payable and credit cash.

Cut-off dates for data entry are established with remote users is an example of a system production control technique because it ensures that data is entered within a specific timeframe, allowing for timely and accurate processing. By setting cut-off dates, the organization can prevent delays in data entry and ensure that all necessary information is captured in a timely manner. This technique helps in maintaining the efficiency and effectiveness of the production process by establishing clear guidelines for data entry.

A reporting agent is a third-party entity that is authorized to file tax forms on behalf of another company. In this scenario, a single company within a group of related companies can appoint a reporting agent to file the Forms W-2 and 941 under its own Employer Identification Number (EIN) for all employees of all the related companies. This means that the reporting agent will handle the tax reporting responsibilities for all the related companies, regardless of whether the employees are concurrently employed or not.

Transportation fringe benefits are tax-free to all employees, regardless of their income level. This means that even if these benefits are only provided to highly paid employees, they are still exempt from taxes for all employees. This can include benefits such as employer-provided parking, transit passes, or commuter highway vehicle transportation. The tax-free status of transportation fringe benefits is intended to encourage the use of public transportation and reduce traffic congestion.

When making a federal payroll tax deposit, an advance payment of Earned Income Credit (EIC) is recorded by debiting EIC payable to recognize the liability and crediting cash to reflect the payment. This entry ensures accurate accounting of the advance payment for tax reporting purposes.

The FLSA (Fair Labor Standards Act) requires employers to retain records showing employee's job duties for three years. This is important for ensuring compliance with the Act, as it helps to determine whether employees are classified correctly and receiving the appropriate wages and benefits. By retaining these records, employers can demonstrate that they have accurately assessed and assigned job duties, which can be useful in case of any disputes or audits.