Part 1: Multiple Choice 100 Points
Prehire questions pertaining to religion, gender, national origin, or age are allowed if:
a. all employees are asked the same questions.
b. only foreign-born applicants are asked these questions.
c. these factors are bona fide occupational qualifications for the job.
d. they are not in written form.
e. the applicant is married.
ERISA provides for full vesting of the employer s contribution to an employee s pension fund in three years or gradually over:
a. ten years.
b. five years.
c. six years.
d. seven years.
e. No gradual vesting is allowed.
Form I-9, which is completed by each employee, deals with:
a. contributions to individual retirement accounts.
b. verification of employment eligibility.
c. eligibility for unemployment benefits.
d. eligibility for Medicare benefits.
e. none of the above.
Which of the following is not a provision of the Fair Labor Standards Act (FLSA)?
a. Restricts the employment of child labor
b. Sets up minimum wage
c. Forbids discrimination in hiring
d. Mandates equal pay for equal work, regardless of sex
e. All are provisions of the FLSA.
In August 2011, the minimum hourly wage was:
The tips received by a tipped employee are less than $5.12 of the minimum hourly tip credit rate. The maximum permissible tip credit is:
a. $30 a month.
b. $5.12 an hour.
c. 45% of the employee s minimum wage.
d. 50% of the employee s minimum wage.
e. the amount of tips actually received by the employee.
To determine a pieceworker s regular hourly rate for one week:
a. divide the total weekly earnings from piece rates and all other
sources by the hours worked in the week.
b. divide the total weekly earnings from piece rates by the number of
c. divide the total weekly earnings from piece rates, less earnings from
other sources, by the hours worked in a week.
d. add the total weekly earnings from piece rates and all other sources
and divide by the total number of pieces produced.
e. do none of the above.
The taxes imposed under the Social Security Act consist of:
a. two taxes on employers.
b. two taxes on employees.
c. OASDI and HI taxes.
d. taxes on the net earnings of the self-employed.
e. all of the above.
Which of the following payments are not taxable for FICA?
a. Back-pay awards.
b. Wage supplements to cover difference between employees salaries and their military pay.
c. Dismissal pay.
d. Difference between employees regular wages and the amount received for jury duty.
e. Retroactive wage increase.
FICA defines all of the following as employees except:
a. vice presidents.
d. full-time life insurance salespersons.
e. payroll managers.
The FICA tax rates for the self-employed are:
a. 6.2% (OASDI) and 1.45% (HI).
b. 12.4% (OASDI) and 1.45% (HI).
c. 6.2% (OASDI) and 2.9% (HI).
d. 10.0% (OASDI) and 1.0% (HI).
e. none of the above.
Which of the following deposit requirements pertains to a monthly depositor who has accumulated employment taxes of $2,900 at the end of October?
a. No deposit is required.
b. The undeposited taxes should be carried over to the end of November.
c. The taxes must be deposited on or before November 15.
d. The taxes must be deposited on or before the next banking day.
e. None of the above.
Barr fails to make a timely deposit of FICA taxes and withheld income taxes until five days after the due date. The penalty facing Barr is:
a. 2% of the undeposited taxes.
b. 5% of the undeposited taxes.
c. 10% of the undeposited taxes.
d. 25% of the undeposited taxes.
e. none of the above.
Which of the following cannot be included in a cafeteria plan?
a. Health insurance
b. Group-term life insurance (first $50,000 of coverage)
c. Dependent care assistance (first $5,000)
d. Self-insured medical reimbursement plan
e. Educational assistance
Which of the following noncash fringe benefits does not represent taxable income subject to federal income tax withholding?
a. Flight on employer-provided airline
b. Personal use of company car
c. Sick pay
d. Employer-paid membership to a country club
e. All of the above are taxable.
A company must withhold federal income taxes from payments made to independent contractors in which of the following cases?
a. When there is a signed contract between the parties
b. When the contractor is paid more than $10,000
c. When the contractor is a corporation
d. When the contractor has not provided a taxpayer identification number and the contract is $600 or more
e. All of the above
Which of the following forms is used to report the amount of distributions from pension and retirement plans?
If the employer is tardy in paying the state contributions, the credit against the federal tax is limited to what percent of the late payments that would have been allowed as a credit if the contributions had been paid on time?
In order to avoid a credit reduction for Title XII advances, a state must repay the loans by:
a. the end of the year of the loans.
b. the end of the year the credit reduction is scheduled to take effect.
c. the end of the third year after the year of the loans.
d. November 10 of the year the credit reduction is scheduled to take effect.
e. June 30 of the year after the loans.
An employer must pay the quarterly FUTA tax liability if the liability is more than:
Which of the following is not an expense of the employer?
a. FUTA tax
b. FICA tax HI
c. FICA tax OASDI
d. SUTA tax
e. Union dues withheld
Which of these accounts shows the total gross earnings that the employer incurs as an expense each payday?
a. Payroll Taxes
b. Federal Income Taxes Payable
c. Wages Expense
d. Salaries Payable
e. None of the above
Part 2: Problems 100 Points
1. Bakker is paid an hourly rate of $7.65. For 130 minutes spent on a
certain job, Bakker is paid
2. Elder is paid a monthly salary of $2,250. Overtime is paid for hours
beyond 40 in each workweek. One week, Elder works 7 hours overtime.
Elder s gross pay for the week is
3. Kerr receives an annual $25,700 base salary for working the territory
in Arizona. A quota of $900,000 in sales has been set for that state.
Kerr receives an 8% commission on all sales in excess of $900,000.
This year, the sales are $965,000. The total earnings due Kerr this year
4. Fess receives wages totaling $74,500 and has net earnings from self-employment amounting to $51,300. In determining her taxable self-
employment income for the OASDI tax, how much of her net self-
employment earnings must Fess count?
5. During 20 , Garr was paid a weekly salary of $2,090. The
amount of FICA to be withheld from the following payments is:
(a) For the 51st week
(b) For the 52nd week
(c) For the 53rd week
6. Use the appropriate table to determine the amount to withhold for federal income tax from each of the following biweekly wages (biweekly withholding allowance = $140.38):
Patrick Patrone (single, 2 allowances), $925 wages
Carson Leno (married, 4 allowances), $1,195 wages
Carli Lintz (single, 0 allowances), $700 wages
7. Queno Company had FUTA taxable wages of $510,900 during the year. Determine its: Gross FUTA Tax Rate-6.2%; Net FUTA Tax Rate-.8%; SUTA Tax Rate-5.4%
(a) gross FUTA tax
(b) FUTA tax credits (assuming no penalties)
(c) net FUTA tax