Payroll MCQs (Chapterwise Multiple Choice Questions)

What is the current 2012 FICA SS rate for employees?

4.2%

7.65%

1.45%

6.2%

Not enough information

Answer & Explanation

Correct Answer: 4.2%

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What is Form W3?

A detailed version of Form W2

An annual tax filing form for private corporations

A form filed with the Social Security Administration summarizing all employee W2s

The same as Form 941

Answer & Explanation

Correct Answer: A form filed with the Social Security Administration summarizing all employee W2s

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The term "bona fide occupational qualification" refers to _______________.

the Equal Pay Act

a qualification that allows an employer to hire based on race, religion, or gender

a qualification that forces employers to hire based on race, religion, or gender

a qualification that does not allow an employer to hire based on race, religion, or gender

Answer & Explanation

Correct Answer: a qualification that allows an employer to hire based on race, religion, or gender

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What does IRA stand for?

Independent Revenue Account

Individual Retirement Account

None of these

Interest Returns Account

Answer & Explanation

Correct Answer: Individual Retirement Account

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How long should an employer retain payroll information?

Three years.

Fifty years.

Ten years.

Five years.

Answer & Explanation

Correct Answer: Three years.

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Which of the following journal entries would be made to void a payroll check printed in error?

Dr: Salary Payable, Cr: Salary Expense

Dr: Salary Expense, Cr: Cash

Dr: Cash, Cr: Salary Payable

Dr: Cash, Cr: Salary Expense

Answer & Explanation

Correct Answer: Dr: Cash, Cr: Salary Expense

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The pay earned by hourly-paid employees is usually referred to as?

Wage

Salary

Answer & Explanation

Correct Answer: Wage

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At ABC School, the current salary schedule for custodians is as follows:

Step 1: $12.47
Step 2: $13.09
Step 3: $13.75
Step 4: $14.44
Step 5: $15.16

Employees are moved to the next step on the salary schedule annually. Wages for the year have increased 2.25% from the previous school year. Employee C was paid on Step 2 for the previous school year.

Given the above schedule, what is Employee C's pay rate for the current school year?

$15.04

$16.07

$12.02

$14.06

Answer & Explanation

Correct Answer:

$14.06

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What is an ACH payment related to?

Local taxation

Direct deposits

Financial privacy

All of these

Answer & Explanation

Correct Answer: Direct deposits

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True or false? A new employee must fill out a W-4.

True

False

Answer & Explanation

Correct Answer: True

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Payroll Quick Quiz

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