CPP Practice Exam 3

25 Questions | By V091200 | Last updated: Mar 22, 2022 | Total Attempts: 2839

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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.

An accrual entry of $1,000 was made in 2008 for a bonus to be paid in January 2009. The bonus was paid in 2009 and federal income tax (using the supplemental rate) and FICA tax were paid by the employer. Which of the following is the correct entry to record the disbursement of the bonus in January 2009?
- A.
  
  Debit salary expense $484.78, debit wages payable $1,000, credit cash $1,000, credit taxes payable $484.78
- B.
  
  Debit wages payable $1,326.50, debit taxes payable $326.50, credit cash $1,00
- C.
  
  Debit salary expense $326.50, debit wages payable $1,000, credit cash $1,000, credit cash $1,000, credit taxes payable $326.50
- D.
  
  Debit salary expense $1484.78, credit taxes payable $484.78, credit cash $1,000
2.

Which of the following is an example of a system production control technique?
- A.
  
  Balances in liability
- B.
  
  The payroll manager periodically distributes paychecks
- C.
  
  Payroll journal entries are approved by the finance manager
- D.
  
  A calendar is maintained for payroll run dates
3.

Under which of the following situations may an employee change an election made under a 125 cafeteria plan within the plan year?
- A.
  
  Employee receives a salary increase
- B.
  
  Employees divorces
- C.
  
  Employee is demoted
- D.
  
  Employee transfers to another department
4.

An integrated HRIS offers the advantage of:
- A.
  
  Enhanced screen display of employee data
- B.
  
  Improved security of confidential payroll
- C.
  
  Reduced effort in the maintenance of employee records
- D.
  
  Decreased requirements for technical improvements
5.

Employee Jack, a nonexempt employee, must travel by plane from Chicago to Houston to inspect the security system recently, installed at a client's site. Jack is normally scheduled to work from 8:00 a.m. to 5:00 p.m., Monday through Friday. Jack arrives at Chicago O'Hare airport on Sunday at 4:00 p.m. and lands at Houston Intercontinental airport at 6:00 p.m. Jack begins work at 8:00 a.m. on Monday, works through lunch, and returns to the airport for his return flight at 5:00 p.m. He arrives in Chicago at 7:00 p.m. Monday evening. Under FLSA, how many hours of pay are due Jack for Sunday and Monday?
- A.
  
  14
- B.
  
  10
- C.
  
  11
- D.
  
  8
6.

Sally's department was scheduled to work from 8:00 a.m. until 5:00 p.m. It was announced to all employees that a severe winter storm was expected to reach the city between 4:00 p.m. and 5:00 p.m. Employees of Sally's department asked if they, like most other departments, would be allowed to leave work at 3:00 p.m. to avoid being caught in the storm. Sally was sympathetic, but after much discussion denied the request, stating that hte policy was clear that employees were to remain on duty until 5:00 p.m. Which of the following management styles is Sally demonstrating?
- A.
  
  Autocratic
- B.
  
  Participative
- C.
  
  Bureaucratic
- D.
  
  Diplomatic
7.

For 2009, the mandatory rate of federal income tax withholding on supplemental wages in excess of $1 million is:
- A.
  
  28%
- B.
  
  20%
- C.
  
  35%
- D.
  
  25%
8.

Which of the following forms pertains to a merger or acquisition?
- A.
  
  Schedule M
- B.
  
  Schedule A
- C.
  
  Schedule B
- D.
  
  Schedule D
9.

A manager who embraces the theory of situational leadership is most likely to emphasize:
- A.
  
  Versatility in the approach used in dealing with subordinates
- B.
  
  Strict adherence to all company policies and procedures
- C.
  
  The need for employees to have freedom in getting their work done
- D.
  
  Quick decision making and prompt reaction to events
10.

In 2009, employee Chris was transferred from her company's headquarters to a distribution center 1,000 miles away. The company reimbursed her for meal expenses totaling $100 and lodging expenses totaling $300 incurred while driving from her old residence to her new. Chris' company direclty paid the moving company $2,000 for transporting her houshold goods. What portion of Chris' employer-paid relocation expenses is reported in box 1, "wages, tips, other compensation?"
- A.
  
  $0
- B.
  
  $100
- C.
  
  $2,300
- D.
  
  $2,400
11.

In 2009, employee Chris was transferred from her company's headquarters to a distribution center 1,000 miles away. The company reimbursed her for meal expenses totaling $100 and lodging expenses totaling $300 incurred while driving from her old residence to her new. Chris' company direclty paid the moving company $2,000 for transporting her houshold goods. How much of the relocation reimbursement is exempt from FITW, FICA, and FUTA?
- A.
  
  $0
- B.
  
  $100
- C.
  
  $2,300
- D.
  
  $2,400
12.

Which of the follwoing is one of the purposes of a job description?
- A.
  
  Illustrates the position in relation to others in the organization
- B.
  
  Provides implementation plan for conversion to new system
- C.
  
  Describes incumbent's obligations to pay appropriate federa, state, and local taxes while holding the position
- D.
  
  Outlines individual performance goals for next fiscal year
13.

What is one of the major considerations when evaluating and selecting a software system for payroll?
- A.
  
  The arrangement of the panels for on-line data entry
- B.
  
  The sale's representative's knowledge of payroll
- C.
  
  The fit of the technical platform with the company's strategic plans
- D.
  
  The number of trainers the software has available
14.

Employee Dan, a sales representative, is reimbursed for business travel expenses incurred for out-of-town trips. Dan completes an expense report each month showing the date expenses were incurred and receipts substantiating the amount of the expenses. In August, Dan's employer reimbursed travel expenses of $500 for meals, $1,200 for hotels, and $900 for airfare. Choose the answer that properly reflects the income Dan must declare and the corporate tax deduction that Dan's employer may claim
- A.
  
  Dan's income =$250; Employer's deduction = $2,600
- B.
  
  Dan's income =$0; Employer's deduction = $2,600
- C.
  
  Dan's income =$500; Employer's deduction = $2,350
- D.
  
  Dan's income =$0; Employer's deduction = $2,350
15.

Which fo the following is one of the purposes of a job description?
- A.
  
  Provides security access and passwords to be assigned to the incumbent
- B.
  
  Specifies frequency of interdepartmental meetings
- C.
  
  Reinforces delineation between statutory employees and independent coworkers
- D.
  
  Describes the experience, skills, knowledge, abilities, education, and training needed to perform the job.
16.

Which of the following generally is excluded when computing the workers' compensation insurance premium?
- A.
  
  Vacation pay
- B.
  
  Bonuses
- C.
  
  Premium overtime pay
- D.
  
  Shift pay
17.

It is suggested that an employee authorization for ACH credits and reversals be retained for how many years following the employee's discountinuance of direct deposit?
- A.
  
  0
- B.
  
  2
- C.
  
  3
- D.
  
  4
18.

Wages are paid on Wednesday, June 30, that gives rise to a deposit liability fo $90,000. Wages are again paid on Thursday July 1, that give rise to a deposit liability of $12,000. Assume that Monday, July 5, is a nonbanking day. Under the semiweekly deposit rule, when are the deposits due?
- A.
  
  $102,000 is due on Wednesday, July 7
- B.
  
  $102,000 is due on Friday, July 2
- C.
  
  $102,000 is due on Thursday, July 8
- D.
  
  $102,000 is due on Friday, July 9
19.

Which of the following would NOT be an asset account?
- A.
  
  Wages payable
- B.
  
  Work-in-progress
- C.
  
  Cash
- D.
  
  Employee receivables
20.

When the state does not allow workers' compensation converage through a private insurance carrier, this is referred to as a:
- A.
  
  Public fund state
- B.
  
  Competitive state
- C.
  
  National council state
- D.
  
  Monopolistic state
21.

Which of the following best describes the model in outsourcing in which the service provider is the co-employer of it's client?
- A.
  
  Shared services
- B.
  
  Professional employer organization
- C.
  
  Temporary agency
- D.
  
  Application service provider
22.

An example of a policy is:
- A.
  
  Payroll receives changes of status documents from human resources after data entry has occurred.
- B.
  
  Time cards are filed by cost center in the records room
- C.
  
  The PC's of the payroll employees are connected to the same printer
- D.
  
  Employees receive paid sick leave after the second day of absence.
23.

Which of the following is a component of a graphical user interface?
- A.
  
  LAN/WAN
- B.
  
  Icon
- C.
  
  CD-RPM
- D.
  
  Modem
24.

Which of the following is not likely to be in the skills set needed for a manager?
- A.
  
  Organization
- B.
  
  Planning
- C.
  
  Communications
- D.
  
  Partiality
25.

Which of the following is the primary purpose of an employee's performance review?
- A.
  
  To convey the company's financial goals for the next fiscal year
- B.
  
  To present a comparison of the salary of the employee to that of others in the department
- C.
  
  To encourage performance that is on task with established goals
- D.
  
  To document the justification for terminating an employee