CCP Practice Exam 5
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 Read morewell.
- 1.
A security quard workd the regular evening shift on Christmas Day. Under the FLSA, the employer must pay the employee:
- A.
Time and one half for all hours worked
- B.
Holiday pay plus time and one half
- C.
Double time
- D.
Minimum wage
Correct Answer
D. Minimum wageExplanation
According to the Fair Labor Standards Act (FLSA), the employer must pay the employee minimum wage for all hours worked. Since the question states that the security guard worked the regular evening shift on Christmas Day, there is no mention of any additional factors such as overtime or holiday pay. Therefore, the correct answer is minimum wage.Rate this question:
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- 2.
In the lookback period, Company A incurred payroll tax liabilities of $182,404.92. Wages are paid Friday, October 15. The total federal tax deposit is $2,500. The deposit would be due on:
- A.
Monday, October 18
- B.
Wednesday, October 20
- C.
Friday, October 22
- D.
Monday, November 15
Correct Answer
B. Wednesday, October 20Explanation
The deposit for the total federal tax would be due on Wednesday, October 20. This is because the question mentions that wages are paid on Friday, October 15, and the lookback period for payroll tax liabilities is not specified. Therefore, we can assume that the lookback period is a week. The deposit for federal tax is typically due within three banking days after the pay date, which in this case falls on Wednesday, October 20.Rate this question:
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- 3.
Technology that allows managers to approve or change data in the records for which they are repsonsible is called:
- A.
Middleware
- B.
Manager self-service
- C.
Prototyping
- D.
Outsorucing
Correct Answer
B. Manager self-serviceExplanation
Manager self-service refers to a technology that enables managers to approve or modify data in the records that fall under their responsibility. This technology empowers managers to have direct control over the data and make necessary changes without relying on IT or other departments. It streamlines the process and allows managers to efficiently manage and update the records they are accountable for.Rate this question:
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- 4.
A negative balance in the union dues deduction account indicates which of the following?
- A.
Initiation fees were included in deductions
- B.
Dues have been deducted in excess of remittance to the union
- C.
Employee deductions have exceeded amounts remitted to the union
- D.
Dues have been deducted and remitted to the union at the same time
Correct Answer
C. Employee deductions have exceeded amounts remitted to the unionExplanation
A negative balance in the union dues deduction account indicates that the amount deducted from employees' paychecks for union dues is greater than the amount that has been remitted or paid to the union. This means that the deductions made from employees' salaries have exceeded the amounts that have been sent to the union, resulting in a negative balance.Rate this question:
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- 5.
Which of the following is an example of a system production control technique?
- A.
Payroll manager meets with operations departments to discuss year-end procedures
- B.
Tax penalties incurred by company are handled by the accounting department
- C.
Department documentation is maintained on-line
- D.
Payroll department members' performance reviews are conducted after Forms W-2 are produced each year
Correct Answer
A. Payroll manager meets with operations departments to discuss year-end proceduresExplanation
The correct answer is "Payroll manager meets with operations departments to discuss year-end procedures." This is an example of a system production control technique because it involves coordination and communication between different departments to ensure smooth operations and adherence to procedures during the year-end payroll process. By meeting with the operations departments, the payroll manager can discuss any potential issues or changes that need to be implemented to ensure accurate and timely payroll production. This technique helps to maintain control over the payroll system and ensure that it operates efficiently.Rate this question:
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- 6.
Antoine is a sole proprietor who employs several specialists who custom paint cars in his shop. On weekends, a friend of Antoine's who ownd a cleaning service cleans Antoine's shop and storage areas and charges Antioine by the hour for his services. Which of the following best describes the payment for the cleaning services provided by Antoine's friend?
- A.
The payment is wages paid to an employee
- B.
The payment is non-employee compensation paid to an independent contractor
- C.
The payment is a nontaxable payment of detached generosity
- D.
The payment is a payment made to a statutory employee
Correct Answer
B. The payment is non-employee compensation paid to an independent contractorExplanation
The payment for the cleaning services provided by Antoine's friend is considered non-employee compensation paid to an independent contractor. This is because Antoine's friend is not an employee of Antoine's shop but rather operates his own cleaning service and charges Antoine by the hour for his services. As an independent contractor, Antoine's friend is responsible for his own taxes and benefits, and Antoine does not withhold taxes or provide benefits typically given to employees.Rate this question:
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- 7.
Antoine is a sole proprietor who employs several specialists who custom paint cars in his shop. On weekends, a friend of Antoine's who ownd a cleaning service cleans Antoine's shop and storage areas and charges Antioine by the hour for his services. If Antoine pays his friend by check rather than cash, which of the following describes the payment for the cleaning service provided by his friend?
- A.
The payment is wages paid to an employee
- B.
The payment is non-employee compensation paid to an independent contractor
- C.
The payment is a nontaxable payment of detached generosity
- D.
The payment is a payment made to a statutory employee
Correct Answer
B. The payment is non-employee compensation paid to an independent contractorExplanation
The payment for the cleaning service provided by Antoine's friend is considered non-employee compensation paid to an independent contractor. This is because Antoine's friend is not an employee of Antoine's shop, but rather a separate business owner providing a service. By paying with a check, it indicates that Antoine is treating the payment as a business expense to an independent contractor, rather than wages to an employee.Rate this question:
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- 8.
It is discovered in March 2009 that an employee's Social Security number was reported incorrectly on the employee's 2008 Form W-2. The employer is required to:
- A.
Send a letter notifying the employee of the error
- B.
File a Form 941-X with the IRS
- C.
File a Form W-2c with the SSA
- D.
File a Form 941c with the IRS
Correct Answer
C. File a Form W-2c with the SSAExplanation
The correct answer is to file a Form W-2c with the SSA. This is because the employer needs to correct the Social Security number that was reported incorrectly on the employee's 2008 Form W-2. The Form W-2c is used to correct errors on previously filed Forms W-2 and must be filed with the SSA to ensure accurate reporting of the employee's Social Security information.Rate this question:
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- 9.
Scalability describes the attribute of a computer environment to:
- A.
Print output in duplex
- B.
Allow upgrades, expansion or reduction with little impact on processing
- C.
Use telephone lines to communicate between physical locations
- D.
Use video and audio
Correct Answer
B. Allow upgrades, expansion or reduction with little impact on processingExplanation
Scalability refers to the ability of a computer environment to accommodate changes in size or capacity without significantly affecting its performance. This means that the system can easily handle upgrades, expansions, or reductions in its resources, such as adding more storage or processing power, without causing any major disruptions or slowdowns in its operations.Rate this question:
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- 10.
Which of the following payments are subject to federal income tax withholding?
- A.
Salary advance
- B.
Expense advance
- C.
Group-term life over $50,000
- D.
Pretax contributions to a 401(k) plan
Correct Answer
A. Salary advanceExplanation
A salary advance is subject to federal income tax withholding because it is considered a form of income. When an employee receives a salary advance, it is essentially an early payment of their wages. Therefore, it is treated as taxable income and is subject to federal income tax withholding.Rate this question:
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- 11.
Which of the following is an example of a system edit?
- A.
Accrued payrolls are automatically reversed by the system
- B.
A file is created or the bank that has the check number, amount and date
- C.
A warning report displays information about employee checks if nte pay exceeds a predefined reasonable amount
- D.
The payroll specialist uses a password when signing on to the system
Correct Answer
C. A warning report displays information about employee checks if nte pay exceeds a predefined reasonable amountExplanation
A system edit is a feature in a system that checks for specific conditions or criteria and generates a warning or error message if those conditions are met. In this case, the warning report displays information about employee checks if the net pay exceeds a predefined reasonable amount, indicating that it is an example of a system edit.Rate this question:
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- 12.
The manager who interacts little with subordinates, making decisions without input is what type of leader?
- A.
Diplomatic
- B.
Bureaucratic
- C.
Empathetic
- D.
Autocratic
Correct Answer
D. AutocraticExplanation
An autocratic leader is someone who exercises complete control and authority over their subordinates, making decisions without seeking input or involvement from others. They tend to have little interaction with their subordinates and often rely on their own judgment and expertise. This leadership style can be effective in certain situations where quick and decisive action is necessary, but it can also lead to low employee morale and limited creativity and innovation within the team.Rate this question:
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- 13.
What does the following journal entry represent? Debit State Unemployment Tax Expense $6,340 Credit Employment Tax Payable $6,340
- A.
The accrual of state unemployment tax to one or more states
- B.
A record of tax deductions
- C.
The payment of state unemployment insurance tax
- D.
An entry to correct tax withheld
Correct Answer
A. The accrual of state unemployment tax to one or more states -
- 14.
The audit of the payroll department by a public accounting firm is reffered to as a(n):
- A.
Internal audit
- B.
Procedural audit
- C.
External audit
- D.
Official audit
Correct Answer
C. External auditExplanation
An external audit refers to the audit of the payroll department conducted by a public accounting firm. This type of audit is performed by an independent third party outside of the organization to provide an objective and unbiased assessment of the department's financial records, processes, and compliance with relevant laws and regulations. The purpose of an external audit is to provide assurance to stakeholders, such as investors, creditors, and regulators, that the financial information presented by the payroll department is accurate and reliable.Rate this question:
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- 15.
Which of the following is one of the purposes of a job description?
- A.
Describes the company's record retention policies
- B.
States targets for direct deposit
- C.
Describes the principle duties to be performed
- D.
Documents guarantees of future pay increases
Correct Answer
C. Describes the principle duties to be performedExplanation
A job description serves the purpose of outlining the main responsibilities and tasks that an employee is expected to perform in a specific role. It provides a clear understanding of the duties and expectations associated with the job, helping both the employer and the employee to align their expectations and ensure that the job is performed effectively. It helps in recruitment and selection processes by providing a basis for evaluating candidates' qualifications and suitability for the role. Additionally, it serves as a reference document for performance evaluations and can be used to establish performance standards and goals.Rate this question:
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- 16.
An employee normally earns $10 per hour. What would the employee's gross wages be under the FLSA if he worked 48 hours in a workweek and was paid a $50 production bonus?
- A.
$585.00
- B.
$570.00
- C.
$574.16
- D.
$583.04
Correct Answer
C. $574.16Explanation
The employee normally earns $10 per hour, so for 48 hours of work, the base pay would be 48 * $10 = $480. The employee also receives a $50 production bonus, so the total gross wages would be $480 + $50 = $530. However, the FLSA requires that overtime be paid for any hours worked over 40 in a workweek. In this case, the employee worked 48 hours, so 8 of those hours are considered overtime. Overtime pay is calculated at 1.5 times the regular rate, so the overtime pay would be 8 * $10 * 1.5 = $120. Adding the overtime pay to the base pay and bonus, the total gross wages would be $530 + $120 = $650. However, the FLSA also requires that the bonus be included in the calculation of overtime pay. Since the bonus is $50, the overtime pay is recalculated as 8 * ($10 + $50) * 1.5 = $480. Adding the recalculated overtime pay to the base pay and bonus, the total gross wages would be $530 + $480 = $1010. Finally, the FLSA allows for a credit against overtime pay for the bonus, so the final gross wages would be $1010 - $50 = $960. However, the question asks for the gross wages under the FLSA, so the correct answer is $960.Rate this question:
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- 17.
Under the statutory recordkeeping requirements of the IRS, the employer should retain an undeliveralbe Form W-2 for how many years?
- A.
2
- B.
4
- C.
3
- D.
5
Correct Answer
B. 4Explanation
Under the statutory recordkeeping requirements of the IRS, the employer should retain an undeliverable Form W-2 for 4 years. This is important for maintaining accurate tax records and ensuring compliance with IRS regulations. By retaining the undeliverable Form W-2 for 4 years, the employer can provide it to the employee or the IRS if needed for any tax-related purposes.Rate this question:
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- 18.
Which of the following is an example of a system production control technique?
- A.
TQM meetings are scheduled with managers
- B.
Internal auditors perform random tests of gross to net calculations
- C.
Batches are assigned numbers according to payroll cycles
- D.
Wages owed deceased employees are paid to the employees' estates
Correct Answer
C. Batches are assigned numbers according to payroll cyclesExplanation
Batches being assigned numbers according to payroll cycles is an example of a system production control technique. This technique helps to organize and track the production process by assigning specific numbers to batches of work that are completed during specific payroll cycles. This allows for better control and monitoring of the production process, ensuring that tasks are completed efficiently and accurately within designated timeframes.Rate this question:
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- 19.
Effective in 2009, errors in the reporting of FICA wages are reported to the IRS on which of the following forms?
- A.
W-2c
- B.
941-X
- C.
941c
- D.
940
Correct Answer
B. 941-XExplanation
Errors in the reporting of FICA wages are reported to the IRS on Form 941-X. This form is used to correct errors on previously filed Form 941, which is the Employer's Quarterly Federal Tax Return. Form 941-X allows employers to amend their previous filings and report any errors or discrepancies in the reporting of FICA wages.Rate this question:
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- 20.
Global Globe Productions has employees in all states. Under federal law, which of the following statements is NOT true about Global's direct deposit program for it's employees?
- A.
A participant must furnish his or her banking institution's transit routing number
- B.
Global may mandate that all wages be direct deposited to the accounts of a specific bank
- C.
Global must retain authorizations for debit entries for two years
- D.
Global must make funds available in participants' accounts by the opening of business on payday
Correct Answer
B. Global may mandate that all wages be direct deposited to the accounts of a specific bankExplanation
The correct answer is "Global may mandate that all wages be direct deposited to the accounts of a specific bank." This statement is NOT true because under federal law, employers are generally required to offer their employees the option to choose the bank where they want their wages to be deposited. Employers cannot mandate that wages be deposited to a specific bank.Rate this question:
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- 21.
The maximum civil penalty for failure to file Form W-2 electronically when required to do so is:
- A.
$50 per statement to a maximum of $250,000
- B.
$100 per statement to a maximum of $100,000
- C.
$20 per statement to a maximum of $20,000
- D.
$10 per statement to a maximum of $200,000
Correct Answer
A. $50 per statement to a maximum of $250,000Explanation
The maximum civil penalty for failure to file Form W-2 electronically when required to do so is $50 per statement, with a maximum penalty of $250,000. This means that for each Form W-2 that is not filed electronically, a penalty of $50 can be imposed, but the total penalty cannot exceed $250,000.Rate this question:
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- 22.
A term for passing data between systems is:
- A.
Relocate
- B.
Extension
- C.
Interface
- D.
Continuance
Correct Answer
C. InterfaceExplanation
Interface is the correct answer because it refers to the process of passing data between systems. An interface acts as a bridge or connection that allows different systems or components to communicate and exchange information. It provides a standardized way for systems to interact and share data, ensuring compatibility and seamless integration between them.Rate this question:
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- 23.
Which of the following groups would most likely not be considered customers of the payroll department
- A.
The employees
- B.
Department managers
- C.
State agencies
- D.
Former spouses of employees
Correct Answer
D. Former spouses of employeesExplanation
Former spouses of employees would most likely not be considered customers of the payroll department because they are no longer associated with the company and do not have any financial transactions or employment-related needs that would require them to interact with the payroll department. The payroll department is responsible for managing the payment of current employees, ensuring accurate calculation of salaries, and handling any payroll-related inquiries or issues. Former spouses of employees would not fall into any of these categories and therefore would not be considered customers of the payroll department.Rate this question:
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- 24.
Use of which of the follwoing contributes to the security of the payroll system?
- A.
Fiscal year reporting
- B.
Virus protection
- C.
Per pay cycle journal entires
- D.
Cost containment
Correct Answer
B. Virus protectionExplanation
Virus protection contributes to the security of the payroll system by preventing and detecting any potential malware or viruses that could compromise the system's integrity and confidentiality. It helps to safeguard sensitive employee information, financial data, and ensures that payroll processes are not interrupted or manipulated by malicious software. By regularly updating and scanning the system for viruses, organizations can reduce the risk of unauthorized access, data breaches, and financial loss.Rate this question:
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- 25.
What is the advantage of building a current cost model prior to evaluating software?
- A.
Providing a summary of the costs of the software being evaluated
- B.
Establishing the baseline against which the cost of alternatives being considered can be compared
- C.
Validating the payroll department's operating budget
- D.
Allowing management to understand the new software's functional fit with the company
Correct Answer
B. Establishing the baseline against which the cost of alternatives being considered can be comparedExplanation
Building a current cost model prior to evaluating software is advantageous because it allows for the establishment of a baseline against which the cost of alternatives being considered can be compared. This helps in making informed decisions by comparing the costs of different software options and determining which one offers the best value for money. It also helps in budgeting and financial planning by providing a clear understanding of the costs involved in implementing and maintaining the software.Rate this question:
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Mar 20, 2023Quiz Edited by
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Aug 16, 2011Quiz Created by
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