CPP Practice Exam 4

25 Questions | Total Attempts: 2424

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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. 
    Beth, who works for Nugget Productions, is enrolled in the company's cafeteria plan.  Beth adopts a child in august, and requests a change in her election under the cafeteria plan.  What is the action that may be taken?
    • A. 

      The employer will increase Beth's deduction retroactively to the child's date of birth

    • B. 

      Beth may change her election due to the change in family status

    • C. 

      Nugget Products will suspend Beth's deduction until the first quarter

    • D. 

      There can be no change to Beth's deduction until the first quarter

  • 2. 
    Which of the following best represents compliance under Section 404 of Sarbanes Oxley?
    • A. 

      Accruals entries are made by the payroll staff

    • B. 

      Payroll transactions are reviewed by internal audit

    • C. 

      Service provider initiates all pay transactions

    • D. 

      Benefits enrollment data is maintained by authorized personnel

  • 3. 
    Employee's regular monthly salary is $950.  Employee is scheduled to work 37 hours per week.  Under the FLSA, how much would this employee be paid for each hour in excess of 37 but less than 40 in the workweek?
    • A. 

      $0

    • B. 

      $5.48

    • C. 

      $6.42

    • D. 

      $5.93

  • 4. 
    Which of the following would NOT be correct in the treatment of deceased workers' wages, assuming the wages are paid in the year after the workers' death?
    • A. 

      Payment is exempt from FITW

    • B. 

      Report payment in box1 of Form W-2

    • C. 

      Payment is exempt frm FICA and FITW

    • D. 

      Report payment in box 3 of Form 1099

  • 5. 
    Which of the following steps would be taken first when selecting a new payroll system?
    • A. 

      Release requests for proposal (RFP's)

    • B. 

      Schedule product demonstrations

    • C. 

      Prepare a needs analysis

    • D. 

      Talk to users of the systems being considered

  • 6. 
    Procedures governing employers' payment of wages by direct deposit are governed by:
    • A. 

      IRS

    • B. 

      NACHA

    • C. 

      SSA

    • D. 

      INS

  • 7. 
    Under the Immigration Reform and Control Act, employers and employees are required to complete which fo the following forms:
    • A. 

      SS-5

    • B. 

      W-4

    • C. 

      I-9

    • D. 

      SS-4

  • 8. 
    Which of the following is important when planning a  problem-solving meeting?
    • A. 

      Prepare an agenda and distribute prior to the meeting

    • B. 

      Determine the detailed solution you expect to hear from the participants

    • C. 

      Begin with an overview of good time management

    • D. 

      Invite the participants who will agree with your position

  • 9. 
    Assuming that the moving expense was incurred in 2009, which of the following expense reimbursements is excludable from gross income?
    • A. 

      Mileage for a pre-move househunting trip

    • B. 

      Lodging expenses while waiting for the new home to be built

    • C. 

      Mileage while moving from the old residence to the new

    • D. 

      Travel expenses of spouse to search for new residence at new job location

  • 10. 
    In the first monthly accounting period of a company's fiscal year, which of the following occurs?
    • A. 

      All liability accounts are reset to zero balances

    • B. 

      Unrepaid debts are "forgiven"

    • C. 

      Asset account balances are reclassified

    • D. 

      Asset and liability accounts reflect prior year ending balance

  • 11. 
    Assume that an independent contractor is a foreign person.  What form is he most likely to complete?
    • A. 

      Form W-7

    • B. 

      Form W-4

    • C. 

      Form W-8BEN

    • D. 

      Form W-9

  • 12. 
    The popular term used to describe traditional theories and preceptions is"
    • A. 

      Presumption

    • B. 

      Paradigm

    • C. 

      Cognizance

    • D. 

      Hypothesis

  • 13. 
    The correct entry to record a payment of th employer's share of FICA tax is:
    • A. 

      Debit payroll tax expense, credit cash

    • B. 

      Debit salary expense, credit tax withheld

    • C. 

      Debit cash, credit payroll tax expense

    • D. 

      Debit tax withheld, credit salary expense

  • 14. 
    In keeping with internal control best practices, which of the following would probably not be included in the job description of a payroll specialist?
    • A. 

      Preparing requisition for remitting child support deductions

    • B. 

      Entering employee tax jurisdiction information from Form W-4

    • C. 

      Verifying proper authorization appears on change documents

    • D. 

      Reconciling payroll bank account

  • 15. 
    Which of the following would not be included in the planning stage of a system implementation?
    • A. 

      Determining resources needed for the project

    • B. 

      Creating a task list

    • C. 

      Defining the project's goals and objectives

    • D. 

      Documenting the new software

  • 16. 
    Which of the following represents the best way of addressing an issue of an employee's poor task performance?
    • A. 

      Reassignment to another department

    • B. 

      Targeting training

    • C. 

      Relocating physical work space near the supervisor

    • D. 

      Assigning to an autocratic leader

  • 17. 
    The form used to report wages paid to nonresident aliens that are exempt from federal income tax under a treaty is:
    • A. 

      W-2

    • B. 

      W-8BEN

    • C. 

      5500

    • D. 

      1042-S

  • 18. 
    In the context of fringe benefits, the term "discriminatory plan" refers to a plan that disproportionately favors:
    • A. 

      A sex

    • B. 

      An ethnic group

    • C. 

      The highly paid

    • D. 

      An age group

  • 19. 
    An employer is allowed under deferal law to pay overtime for all hours worked over 80 in a biweekly period.  In what type of industry is this employer likely to be engaged?
    • A. 

      State or local law enforcement

    • B. 

      Health care

    • C. 

      Manufacturing

    • D. 

      Retail

  • 20. 
    Choose the statement that represents the best implementation of internal control:
    • A. 

      Payroll computes cost-of-living increases for employees

    • B. 

      The bank is instructed to send canceled checks directly to the payroll manager

    • C. 

      Supervisors input increases and new hires to the payroll master file

    • D. 

      Payroll master file changes are reviewed by human resources

  • 21. 
    Which of the following is a technique for positive motivation?
    • A. 

      Acknowledging a team member is failing at the regular team meeting

    • B. 

      Posting defects and the perpetrator's name as an example to others

    • C. 

      Rewarding team members for their collective successes

    • D. 

      Terminating a team member at the first delayed deliverable

  • 22. 
    The employer may classify a worker as an independent contractor if the worker:
    • A. 

      Signs a contract

    • B. 

      Is retired or over age 65

    • C. 

      Fails the common-law test

    • D. 

      Furnishes his or her own tools and supplies

  • 23. 
    Another term for service bureaus is:
    • A. 

      Preprocessor

    • B. 

      Prototype

    • C. 

      Business process outsourcer

    • D. 

      Microprocessor

  • 24. 
    Which of the following would never be delegated to a manger's subordinates?
    • A. 

      Responsibility

    • B. 

      Accountability

    • C. 

      Authority

    • D. 

      All of the above

  • 25. 
    The financial statement that is used to evaluate the performance of a business by matching its revenue and related expenses for a particular accounting period is a:
    • A. 

      Trial balance

    • B. 

      General ledger

    • C. 

      Balance sheet

    • D. 

      Income statement

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