CPP Practice Exam 8

25 Questions | Total Attempts: 1062

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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 would most likely be a key step in reconcilling a payroll witholding account?
    • A. 

      Set a schedule for paying taxes withheld

    • B. 

      Identify which payees (tax agencies) have unpaid or overpaid tax amounts and how much for each

    • C. 

      Periodically reviewing the deposit lookback period

    • D. 

      Perform a "reasonable test" to confirm liability is within an acceptable range compared to same time last month

  • 2. 
    Jane voluntarily separated from employment.  She is allowed to continue paying for her medical insurance at cost plust 2% under what legislation?
    • A. 

      Fair Labor Standards Act of 1948

    • B. 

      Tax Reform Act of 1986

    • C. 

      Consolidated Omnibus Budget Reconciliation Act of 1985

    • D. 

      Family and Medical Leave Act of 1993

  • 3. 
    Brenda receives a prize as a winner of a sales contest.  The prize, which is paid from her sales manager's petty cash account, is $25.  Which of the following best represents the impact on her taxable wages?
    • A. 

      The prize is a de minimis gift and excluded from taxable wages

    • B. 

      The prize is subject to FIT, FITW, FICA, and FUTA

    • C. 

      The prize represents a non-accountable business expense reimbursement and is subject to FIT, FITW, FICA, and FUTA

    • D. 

      The prize represents a "gift of detached generosity" and is excluded from taxable income

  • 4. 
    The Social Security Administration's Social Security Number Verification System (SSNVS) is available to employers for:
    • A. 

      Verifying the amounts of taxes paid by employers

    • B. 

      Validating Federal Employer Identification Numbers

    • C. 

      Verifying the accuracy of employee's Social Security numbers

    • D. 

      Confirming new hire information on job applications

  • 5. 
    How should a meeting conclude?
    • A. 

      Invite the participants who agree with your position to participate in the next step

    • B. 

      Collect the participants' personal notes for filing

    • C. 

      Summarize and outline next steps

    • D. 

      Critique each participant's participation prior to closing the meeting

  • 6. 
    Which of the following describes a plan involving the entire organization for carrying on a company's business in the event of a major disaster?
    • A. 

      Implementation plan

    • B. 

      Groupware

    • C. 

      Business continuity

    • D. 

      Production plan

  • 7. 
    An advantage of client/server technology for payroll is:
    • A. 

      Fewer programmers are required to maintain the payroll

    • B. 

      Maintenance fees from the vendor are eliminated

    • C. 

      Programs and database need not be stored on the mainframe

    • D. 

      Time required to balance a payroll is reduced.

  • 8. 
    "Mapping" in the context of a systems conversion refers to:
    • A. 

      Defining resources needed for the project

    • B. 

      Matching data from one system to the data of another

    • C. 

      Developing a flow chart of the conversion process

    • D. 

      Downloads from the mainframe to a PC application

  • 9. 
    A network is:
    • A. 

      Terminals, hard drives, and printers

    • B. 

      Software that provides for the creation of edit files

    • C. 

      A picture of the flow of input through programs

    • D. 

      A system in which computers and terminals are linked together

  • 10. 
    One of the key concepts in total quality management is:
    • A. 

      Employees are willing to accept responsibility

    • B. 

      Management by "walking around"

    • C. 

      Frequent inspection of every phase of a production cycle

    • D. 

      Focus on customer satisfaction

  • 11. 
    The term Workforce Management refers to:
    • A. 

      Time management

    • B. 

      Third party background check services

    • C. 

      Recruiting services

    • D. 

      Management of employee business functions

  • 12. 
    The general term that describes the ability for employees to make changes to certain data in their own records within the payroll or HR system is called:
    • A. 

      Employee self-service

    • B. 

      Employee empowerment

    • C. 

      Enabled systems

    • D. 

      Extranet

  • 13. 
    Which of the following is the first step on goal-setting?
    • A. 

      Ask other department managers for copies of their written plans

    • B. 

      Develop a plan of action

    • C. 

      Obtain salary history for all staff members

    • D. 

      Review the department members' performance appraisals

  • 14. 
    Which of the following employee's wages is likely to be subject to FUTA?
    • A. 

      A child under age 21 employed by parent

    • B. 

      A spouse employed by spouse

    • C. 

      A parent employed by his or her child

    • D. 

      A statutory employee

  • 15. 
    Which of the following employees' wages is likely to be exempt from FICA?
    • A. 

      A child under age 18 employed by a parent

    • B. 

      A parent working for a child

    • C. 

      A spouse working for a spouse

    • D. 

      A statutory employee

  • 16. 
    The effective minimum hourly rate that tipped employees must receive is which of the following?
    • A. 

      50% of the federal minimum wage

    • B. 

      100% of the federal minimum wage

    • C. 

      20% of the federal minimum wage

    • D. 

      No particular rate is required

  • 17. 
    Which of the following forms must be submitted annually by large food and beverage establishments with monthly deposit obligations of more than $100,000?
    • A. 

      8027

    • B. 

      944

    • C. 

      4070

    • D. 

      942

  • 18. 
    Which of the following does NOT represent a deductible business expense?
    • A. 

      Country club dues

    • B. 

      Lodging while on business travel

    • C. 

      Dry cleaning charges while out of town on business

    • D. 

      Golfing event following a business meeting

  • 19. 
    Which of the following forms is completed by an individual who is eligible for and wishes to receive advance payment of the earned income credit?
    • A. 

      W-5

    • B. 

      W-4

    • C. 

      W-4S

    • D. 

      W-10

  • 20. 
    Which of the following would not be included in the system testing stage of an implementation?
    • A. 

      Volume testing

    • B. 

      Functional testing

    • C. 

      Stress testing

    • D. 

      Recruiting tests

  • 21. 
    An employer that pays its state unemployment contributions after the due date of the Form 940 has it's FUTA credit reduced by what percentage?
    • A. 

      90.0%

    • B. 

      10.0%

    • C. 

      5.4%

    • D. 

      6.2%

  • 22. 
    Which of the following documents proves both identity and right to work for Form I-9 verification purposes?
    • A. 

      Social Security card

    • B. 

      Driver's license

    • C. 

      U.S. Passport

    • D. 

      Birth Certificate

  • 23. 
    What does the following journal entry represent? Debit State Unemployment Tax Payable          $6,340.00           Credit Cash                                                             $6,340.00
    • A. 

      The payment of state unemployment tax one or more states

    • B. 

      A record of tax deductions

    • C. 

      The accrual of state unemployment tax liabilities

    • D. 

      An entry to correct tax withheld

  • 24. 
    A U.S. citizen working for a foreign employer outside the United States is subject to which of the following taxes?
    • A. 

      Social Security and Medicare only

    • B. 

      Federal income tax withholding, Social Security, Medicare, and FUTA

    • C. 

      Federal income tax withholding only

    • D. 

      None

  • 25. 
    Each month ABC Company records the amount of after-tax long-term disability (LTD) insurance purchased by its employees who elected to purchase this insurance.  The deduction is equal to the cost of the insurance.  In the month following the deduction, the insurance company invoices ABC Company.  ABC then pays the invoice.  At the end of April, the balance in the LTD general ledger liability account is $438.40.  What does this balance represent?
    • A. 

      Over-payments to the insurance company

    • B. 

      Amounts paid to the insurance company

    • C. 

      Amounts that have been deducted but not paid to the insurance company

    • D. 

      Amounts deducted from employees who have terminated employment

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