THE PAYROLL SOURCE CPP EXAM
2024-2025 ACTUAL EXAM PRACTICE
QUESTIONS AND STUDYGUIDE WITH
DETAILED CORRECT ANSWERS |
VERIFIED
A company has a gross payroll of $120,589.36 that is
taxable for federal income, social security, and medicare
taxes. Federal income tax withheld is $24,117.87;
combined social security and medicare taxes withheld are
$9,225.09. What is the company's total payroll tax liability
for this pay period?
A. $33,342.96
B. $42,568.05
C. $40,156.26
D. $66,685.92 Correct Answer B $42,568.05
$24,117.87 + $9,225.09 + $9,225.09 = $42,568.05
One reason many companies use a Zero Balance
Checking Account is that:
A. cash is available for investment until items are
presented for payment at the company's bank
B. funds do not have to be deposited until the employee
cashes the check
C. the company receives interest on the account
D. bank reconciliations are not required Correct Answer A.
cash is available for investment until items are presented
for payment at the company's bank
,In a customer service situation, Payroll should:
A. assure the caller everything is okay, even when it is not
B. get in the last word
C. avoid addressing stressful issues
D remain assertive and stay focused Correct Answer D.
Remain assertive and stay focused
Each of the following items qualifies as a de minimis fringe
benefit EXCEPT:
A. occasional parties and picnics for employees
B. occasional supper money for working overtime
C. traditional holiday gifts, such as food items
D. group legal services worth less than $100 annually
Correct Answer D. group legal services worth less than
$100 annually
All of the following steps are required when initiating direct
deposit for an employee EXCEPT:
A. prenotification
B. receiving financial institution routing number
C. getting authorization from the employee
D. receiving employee's bank account number Correct
Answer A. Prenotification
When paying supplemental wages along with regular
wages WITHOUT specifying the amount of each, how
would a company determine the amount of income tax to
withhold from the supplemental wages if the employee has
been paid no supplemental so far during the year and the
supplemental wage payment is no more than $1,000,000?
,A. withhold a flat 25% from the supplemental wages and
withhold from regular wages using the appropriate table
B. withhold a flat 25% from the supplemental wages
C. withhold income tax as if the total were a single wage
payment for regular payroll period
D. compute income tax withholding on the regular wages
seperate from the supplemental wages Correct Answer C.
withhold income tax as if the total were a single wage
payment for regular payroll period
An employer that deposits payroll taxes semiweekly incurs
a tax liability of $55,000 on Tuesday and a tax liability of
$110,000 on Wednesday. When must the taxes be
deposited?
A. $55,000 on Thursday and $110,000 on Friday
B. $55,000 on Friday and $110,000 on the next
Wednesday
C. $110,000 on Thursday and $55,000 on Friday
D. $165,000 on Thursday Correct Answer C $110,000 on
Thursday and $55,000 on Friday
Documenting payroll policies and procedures will provide
all of the following results EXCEPT:
A. a vehicle for improving processes
B. a tool for assessing internal business controls
C. a mechanism for educating payroll partners, suppliers,
and customers
D. assurances of payroll personnel competency and
performance Correct Answer D. assurances of payroll
personnel competency and performance
, Which of the following records MUST be kept for the four
years?
A. hours worked
B. time cards
C. OSHA records
D. voided payroll checks Correct Answer D. voided payroll
checks
Techniques for conducting periodic physical payouts:
A. are the same for all employees
B. vary by whether the employee is paid by check or direct
deposit
C. vary for some employees such as telecommuters
D. vary by wage class and compensation level Correct
Answer A. are the same for all employees
Which of the following plans describes a cafeteria plan
under section 125 of the Internal Revenue code?
A. a quantified and accountable expense reimbursement
plan
B. a tax-qualified retirement plan for public education
institutions
C. a plan which permits employees to select from two or
more qualified taxable and nontaxable benefits
D. a plan whereby state government employees may
request that pretax dollars be set aside in a retirement
account until age 59 Correct Answer C. a plan which
permits employees to select from two or more qualified
taxable and nontaxable benefits
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