CPP Practice Exam 10

25 Questions | By V091200 | Last updated: Mar 21, 2022 | Total Attempts: 931

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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 you prepare. Inspired by my lovely wife as she pursued this goal as well.

Questions and Answers

1.

On what form must mistakenly paid wages, for which no repayment is made, be reported?
- A.
  
  W-2
- B.
  
  W-4
- C.
  
  1099-R
- D.
  
  1099-MISC
2.

A report has been requested that is NOT a standard report from the system. This type of report is called a(n):
- A.
  
  Ad-hoc report
- B.
  
  Integrated report
- C.
  
  Batch system report
- D.
  
  Edit report
3.

A procedure to have a time record signed by an employee indicates:
- A.
  
  Authorization for payment
- B.
  
  Confirmation of total hours
- C.
  
  Hours cannot be challenged
- D.
  
  Time spent at the establishment
4.

For an employee earning $10.20 per hour and participating in a 401(k) plan with a deferral per pay period of $50, compute the federal taxable wages based on the following: Biweekly pay period Regular 80 hours 4 hours overtime 3 hours double-time
- A.
  
  $731.40
- B.
  
  $888.40
- C.
  
  $898.60
- D.
  
  $938.40
5.

Which of the following statements is CORRECT regarding a federal tax levy?
- A.
  
  It does not have to be honored if any other garnishments have been served.
- B.
  
  It requires a new order for each pay period.
- C.
  
  It is limited only by the amount of the employee's net pay
- D.
  
  It is continued each pay period until a release of levy is received.
6.

Penalties for failure to make timely deposits are determined by:
- A.
  
  A flat rate of 10% for late deposits.
- B.
  
  5% of the undeposited amount with a maximum of $100,000
- C.
  
  15% of the undeposited amount with a maximum of $100,000
- D.
  
  A four-tiered penalty structure based on the number of days the deposit is late
7.

An employer may exclude a business reimbursement from income when the employee's expenses meet which of the following requirements?
- A.
  
  Reimbursements are made with regular payroll
- B.
  
  Expenses are substantiated and excess advances are returned
- C.
  
  Expenses are business-related, substantiated, and excess advances are retained for future travel.
- D.
  
  Expenses are business-related, substantiated, and excess advances are returned timely.
8.

Under FLSA, a work week is defined as:
- A.
  
  Any 7 consecutive 24-hour periods
- B.
  
  Sunday through Saturday
- C.
  
  A minimum of a 40-hour/5-day time frame
- D.
  
  Stated in a collective bargaining agreement
9.

At least how often must employers report fringe benefits as income for federal tax withholding purposes?
- A.
  
  Each pay period
- B.
  
  Monthly
- C.
  
  Quarterly
- D.
  
  Annually
10.

Certain company records must be retained for four years to comply with regulations of which of the follwoing agencies?
- A.
  
  U.S. Citizenship and Immigration Service
- B.
  
  Internal Revenue Service
- C.
  
  Social Security Administration
- D.
  
  Wage and Hour Division, Department of Labor
11.

To build morale and motivate staff, a manager must:
- A.
  
  Give good reviews and raises
- B.
  
  Reward "stars" and promote competition within the team
- C.
  
  Delegate accountability to staff members
- D.
  
  Be sincere and specific with praise
12.

From which of the following taxes are statutory workers' compensation payments exempt?
- A.
  
  Federal income tax only
- B.
  
  Social security and Medicare taxes only
- C.
  
  Federal unemployment tax only
- D.
  
  Federal income, social security, medicare, and federal unemployment taxes
13.

Which of the following items represents an input interface to the payroll system?
- A.
  
  General ledger
- B.
  
  Time and attendance
- C.
  
  Benefit payments
- D.
  
  Material usage records
14.

A company has a gross payroll of $120,589.36. Federal taxes withheld are $24,117.87; combined social security and Medicare taxes withheld are $6,502.50. What is the company's total tax liability for this pay period?
- A.
  
  $30.620.37
- B.
  
  $37,122.87
- C.
  
  $42,568.04
- D.
  
  $61,240.74
15.

One reason many companies use a Zero Balance checking account is that:
- A.
  
  Cash is available for investment until items are presented for payment at the company's bank
- B.
  
  Funds do not have to be deposited until the employee cashes the check
- C.
  
  The company receives interest on the account
- D.
  
  Bank reconciliations are not required
16.

In a customer service situation, Payroll should:
- A.
  
  Assure the caller everything is okay, even when it's not
- B.
  
  Get in the last word
- C.
  
  Avoid addressing stressful issues
- D.
  
  Remain assertive and stay focused
17.

All of the following items qualify as a de minimis fringe benefit EXCEPT:
- A.
  
  Occasional parties and picnics for employees
- B.
  
  Occasional supper money for working overtime
- C.
  
  Traditional holiday gifts, such as food items
- D.
  
  Group legal services worth less than $70 annually
18.

All of the following steps are required when initiating direct deposit for an employee EXCEPT:
- A.
  
  Pre-notification
- B.
  
  Receiving financial institution routing number
- C.
  
  Getting authorization from the employee
- D.
  
  Receiving employee's bank account number
19.

When paying supplemental wages along with regular wages WITHOUT specifying the amount of each, how would a company determine the amount of income tax to withhold from the supplemental wages if the employee has been paid no supplemental wages so far during the year and the supplemental wage payment is no more than $1,000,
- A.
  
  Withhold a flat 25% from the supplemental wages and withhold from regular wages using the appropriate table.
- B.
  
  Withhold a flat 25% from the supplemental wages.
- C.
  
  Withhold income tax as if the total were a single payment for a regular payroll period.
- D.
  
  Compute income tax withholding on the regular wages separate from the supplemental wages.
20.

An employer that deposits payroll taxes semiweekly incurs a tax liability of $55,000 on Tuesday and a liability of $110,000 on Wednesday. When should the taxes be deposited?
- A.
  
  $55,000 on Thursday and $110,000 on Friday
- B.
  
  $55,000 on Friday and $110,000 on the next Wednesday
- C.
  
  $110,000 on Thursday and $55,000 on Friday
- D.
  
  $165,000 on Thursday
21.

Documenting payroll policies and procedures will provide all of the following results EXCEPT:
- A.
  
  A vehicle for improving processes
- B.
  
  A tool for assessing internal business controls
- C.
  
  A mechanism for educating payroll partners, suppliers, and customers
- D.
  
  Assurances of payroll personnel competency and performance
22.

Which of the following records MUST be kept for four years?
- A.
  
  Hours worked
- B.
  
  Time cards
- C.
  
  OSHA records
- D.
  
  Voided payroll checks
23.

Techniques for conducting periodic physical payouts:
- A.
  
  Are the same for all employees
- B.
  
  Vary by whether the employee is paid by check or direct deposit
- C.
  
  Vary for some employees such as telecommuters
- D.
  
  Vary by wage class and compensation level
24.

Which of the following plans describes a cafeteria plan under section 125 of the Internal Revenue code?
- A.
  
  A quantified and accountable expense reimbursement plan
- B.
  
  A tax-qualified retirement plan for public education institutions
- C.
  
  A plan which permits employees to select two or more qualified taxable and nontaxable benefits
- D.
  
  A plan whereby state government employees may request that pretax dollars be set aside in a retirement account until age 39
25.

Using federal child support guidelines, calculate the maximum amount of support that can be withheld from an employee's semimonthly disposable earnings of $1,500.00. The employee is four months in arrears in making child support payments and has no other dependents.
- A.
  
  $750.00
- B.
  
  $825.00
- C.
  
  $900.00
- D.
  
  $975.00