CPP Practice Exam 7

25 Questions | Total Attempts: 2319

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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. 
    Which of the following is an example of a system edit?
    • A. 

      An on-line message alerts the user that a 401(k) deduction percent higher than the company allows was entered.

    • B. 

      The payroll specialist re-enters an employee's ZIP code

    • C. 

      A special panel or screen is used to input corrections

    • D. 

      The system has an on-line report writer

  • 2. 
    One of the employees of the Great Company called to report to the payroll department that his payroll check was incorrect.  Which of the following is the most appropriate response or action for the payroll department representative who spoke to the caller?
    • A. 

      Explain that due to the intense schedule under which payroll operates, someone will look into the problem before the next regular payday and make an adjustment at that time if one is warranted.

    • B. 

      Record the caller's name and telephone number and promise to call him back as soon as time permits

    • C. 

      Record the caller's name, employee number and telephone number, his analysis of the payroll check, including the reasons he believes his paycheck is incorrect, and provide a time and date for returning his call with a response to his inquiry.

    • D. 

      Acknowledge immediately that a mistake is likely and assure the caller an adjustment will be processed the same day

  • 3. 
    Flawless Flower Shops accepts payments for flowers and local delivery from customers anywhere in the United States.  The employees of Flawless typically work 6 days a week.  How must they be compensated?
    • A. 

      Overtime must be paid on a daily basis

    • B. 

      Overitme is due for hours worked over 40 in a workweek

    • C. 

      Compensatory pay is allowed for hours over 80 in a biweekly pay period

    • D. 

      Double time is required for work on holidays

  • 4. 
    Use of which of the following contributes to the security of the payroll system?
    • A. 

      Field level access restriction

    • B. 

      Reversal entry

    • C. 

      Aggregate withholding

    • D. 

      Quality program

  • 5. 
    Which of the following agencies would most likely enforce rules governing the number of days following the close of the payroll period that employees must be paid?
    • A. 

      Social Security Administration

    • B. 

      Internal Revenue Service

    • C. 

      State workers' compensation board

    • D. 

      State labor department

  • 6. 
    For IRS purposes, the payroll register should be retained for a period of not less than how many years?
    • A. 

      3

    • B. 

      4

    • C. 

      2

    • D. 

      11

  • 7. 
    Form 5500 reporting would be required for which of the following stock plans?
    • A. 

      NSO (nonincentive stock option)

    • B. 

      ISO (incentive stock option)

    • C. 

      Restricted stock

    • D. 

      ESOP (employee stock ownership plan)

  • 8. 
    In 2009, an on-line payroll system alerts the payroll specialist entering data that an employee has a birthdate fo 1996 or after.  What might this indicate?
    • A. 

      Employee is exempt from federal income tax

    • B. 

      Employee may have been hired in violation of child labor laws

    • C. 

      The employer may be able to suspend deductions of Social Security and Meidcare

    • D. 

      A special Form W-4 is required each year for that employee

  • 9. 
    The rate of withholding in 2009 on qualified pension distributions made directly to employees is:
    • A. 

      20%

    • B. 

      30%

    • C. 

      27%

    • D. 

      15%

  • 10. 
    A service company sends employees overseas on assignments that last no more than 4 months at a time.  Which of the following is true with respect to the taxation of those employees?
    • A. 

      They qualify for an income tax exemption under the "physical presence test"

    • B. 

      The are subject to U.S. Taxation on their pay only while in the United States

    • C. 

      They qualify for an income tax exclusion under the "bona fide residence test"

    • D. 

      They are subject to U.S. taxation on their pay for the time in and out of the country

  • 11. 
    Under the FLSA, which of the following restrictions apply when hiring minors under the age 18?
    • A. 

      They are not subject to overtime

    • B. 

      Social Security and Medicare are not deducted for the first 90 days

    • C. 

      Work cannot be performed pursuant to jobs considered hazardous by the U.S. Department of Labor

    • D. 

      If the employees do not have drivers' licenses, the employer may not hire them

  • 12. 
    Which of the following would not be included in the job description of a payroll specialist?
    • A. 

      Entering direct deposit information

    • B. 

      Crafting policy for employee benefits

    • C. 

      Calculating bonus and severance pay

    • D. 

      Sorting checks and deposit statements for distribution

  • 13. 
    Which fo the following statements is true?
    • A. 

      A company's fiscal year must be the same as the calander year

    • B. 

      A company may designate its fiscal year to cover 12 months that differ from the calendar year

    • C. 

      A company's fiscal year must not be the same as the calendar year

    • D. 

      A company must produce Forms W-2 at the end of its fiscal year regardless of the calendar

  • 14. 
    The term used to describe the breaking away from traditional theories and perceptions is:
    • A. 

      Pygmalion effect

    • B. 

      Paradigm shift

    • C. 

      Doctrinaire approach

    • D. 

      Cognitive deviation

  • 15. 
    The entry to record a salary advance to an employee is:
    • A. 

      Debit accounts receivable, credit cash

    • B. 

      Debit salary expense, credit cash

    • C. 

      Debit salary expense, credit wages payable

    • D. 

      Debit cash, credit accounts receivable

  • 16. 
    The entry to record an employee's repayment of a salary advance is (salary advance is deducted on a pretax basis from regular wages):
    • A. 

      Debit cash, credit salary expense

    • B. 

      Debit salary expense, credit accounts receivable

    • C. 

      Debit salary expense, credit wages payable

    • D. 

      Debit accounts receivable, credit cash

  • 17. 
    The entry to recored an employee's repayment of a salary advance is (employee repays advance by personl check):
    • A. 

      Debit accounts receivable, credit cash

    • B. 

      Debit salary expense, credit accounts receivable

    • C. 

      Debit cash, credit accounts receivable

    • D. 

      Debit accounts receivable, credit cash

  • 18. 
    The entry to record an employee's repayment of a salary advance is (employee repays advance by personal check):
    • A. 

      Debit accounts receivable, credit cash

    • B. 

      Debit salary expense, credit accounts receivable

    • C. 

      Debit cash, credit accounts receivable

    • D. 

      Debit cash, credit wages payable

  • 19. 
    The final due date for the second quarter Form 941, assuming that the employer paid all taxes on time is:
    • A. 

      July 10

    • B. 

      June 30

    • C. 

      July 31

    • D. 

      August 10

  • 20. 
    Federal tax withheld from a distribution of $50,000 from a qualified retirement plan paid directly to a retiree age 65 is:
    • A. 

      $0

    • B. 

      $14,000

    • C. 

      $15,500

    • D. 

      $10, 000

  • 21. 
    A cross-functional work team is an important element of:
    • A. 

      Claim of right

    • B. 

      Business process reengineering

    • C. 

      Management by objective

    • D. 

      Benchmarking

  • 22. 
    Which of the following is a reasonable approach when discussing an employee's poor performance?
    • A. 

      Raise the issues during the next departmental meeting

    • B. 

      Assign additional responsibilities

    • C. 

      Provide examples of the performance issues

    • D. 

      Delegate the discussion to one of the employee's peers

  • 23. 
    Which of the following is the most logical order of events in a system implementation?
    • A. 

      Conversation, training, testing, evaluation

    • B. 

      Feasibility, evaluation, developement, testing

    • C. 

      Testing, evaluation, training, documentation

    • D. 

      Training, development, testing evaluation

  • 24. 
    A statutory employee's pay is subject to which of the following taxes?
    • A. 

      Social Security, Medicare and FUTA

    • B. 

      Federal income tax

    • C. 

      None

    • D. 

      Federal income tax, Social Security, and Medicare

  • 25. 
    An HRIS that has one database with functionality pertaining to multiple applications is often called a(n)
    • A. 

      Stand-alone system

    • B. 

      Segregated system

    • C. 

      Cross-functional system

    • D. 

      Integrated system

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