60 Test Bank for Payroll Accounting 1st Edition
by Landin
Multiple Choice Questions
In the event of an ethical breach by a payroll accountant, which
entity is ultimately liable for any monetary damages due to
stakeholders?
1.
2.
3.
4.

The payroll accountant
The company?s CEO or president
The governmental entity associated with company oversight
The entity that issued the license to the accountant

Which of the following is not a privacy act related to payroll
records?
1.
2.
3.
4.

Community Property Act of 1990.
Freedom of Information Act.
U.S. Department of Labor OCFO-1.
U.S. Department of Health and Human Services Privacy Act 09-40-0006.

According to FMLA, during the time that an employee is on family
leave:
1.

Interdependence


Within how many days after initially commencing work must an
employer report a new employee, according to PRWOR?
1.
2.
3.
4.

7
10
20
30

The U.S. v. Windsor case repealed an Act and affected payroll tax
withholdings for certain employees. Which Act did Windsor
repeal?
1.
2.
3.
4.

OSHA
ARRA
ATRA
DOMA

The payroll accountant for Candor, Inc. was found to have issued
payroll checks in the name of several terminated employees.

Public Interest

Which most closely identifies why it is important for payroll
accountants to adhere to the AICPA Code of Ethics?
1.

To avoid potential underpayments of employee compensation.


2.
3.

To prevent fraud by company officers.
To protect the assets of the company and remit money owed to the
government.
4. To maintain personal and professional standards.

Contemporary payroll practices reflect:
1.
2.

The increased use of manual payroll accounting systems.
The decrease in labor costs that reflects the effect of the economic
recession.
3. The strategic use of payroll data as a company planning tool.
4. The replacement of accounting personnel with computerized systems.

The Fair Labor Standards Act contains provisions for:
1.
2.

of employers?
1.
2.
3.
4.

SS-4
ES-4
EIN
W-4

Employment legislation during the Great Depression included
which of the following Acts:
1.
2.
3.
4.

FLSA, FUTA, and FICA
CTPA, Davis-Bacon Act, and FLSA
Walsh-Healey Act, FICA, and ERISA
FUTA, ADA, and FLSA


The main purpose of the Federal Insurance Contribution Act
(FICA) was to:
1.
2.
3.
4.

3.
4.

Responsibilities
Due Care
Integrity
Public Interest

Why do different methods of time collection devices (e.g., time
cards, biometric devices) exist among companies?
1.
2.
3.
4.

They replace personnel with computers, which prevents ethical issues.
They maintain precise tracking of employee whereabouts.
They promote compensation accuracy that matches company needs.
They alleviate the need for internal control.

The Current Tax Payment Act changed employer remittance of
taxes by:
1.
2.
3.

Instituting the mandatory transfer of payroll tax liabilities.
Legislating the amounts of tax withheld from each employee.
Requiring employers to remit taxes during the year based on estimated
liabilities.

3.
4.

HIPAA
ERISA
PRWOR
DOMA

Peter is the owner of a fast-food franchise. When his payroll
accountant quit, he hired his wife, Karen, to take over the payroll
responsibilities. Peter prefers to review the payroll records prior to
disbursement and often asks Karen to add or subtract amount
from employee pay. Which ethical principle most closely
describes Peter and Karen’s unethical actions?
1.
2.
3.
4.

Objectivity and Independence
Integrity
Public Interest
Responsibilities

What is the effect of payroll-related legislation on payroll
practice?
1.
2.
3.


Equal Pay Act.
Fair Labor Standards Act.
Federal insurance Contributions Act.

Which of the following represents a payroll system privacy breach
by Susan, a payroll accountant?
1.
2.

Susan shares information about labor costs with company executives.
Susan alerts department managers about potential FLSA violations in their
departments.
3. Susan discusses specific information about the company?s federal
contracts with friends during lunch.
4. Susan places employee payroll files in a cabinet to which only she and her
supervisor have access.

Payroll taxes were instituted by the 16th Amendment to the
United States Constitution:
1.
2.
3.
4.

To pay for governmental salaries.
To make money from businesses that had employees.
To fund infrastructure improvements of booming cities.
To penalize people who needed employment.

Which Act governs the minimum wage that must be paid to


Discussions of wages and hours with the employee and his or her manager.
Contract negotiations with governmental entities.
Preparation for accounting system audits.
Remittance of all payroll tax deposits.

The USERRA legislation provided the following:
1.

Military service members receive mandatory priority during the hiring
process.
2. Military service members receive preferential treatment for promotions and
raises during the normal course of business.
3. Military members must receive the same promotions and compensation
that they would have received when they return from active duty.
4. Injured military veterans must be allowed to return to work, but their
compensation may be adjusted based on their disability.

60 Free Test Bank for Payroll Accounting 1st Edition by
Landin Multiple Choice Questions - Page 2
The ________________mandated that employers verify an
employee’s legal ability to work in the United States.
1.
2.
3.
4.

Personal Responsibility and Work Opportunity Reconciliation Act of 1996.
Health Insurance Portability and Accountability Act of 1996.
American Reinvestment and Recovery Act of 2009.


She must be compensated for all hours worked past 8 in a single day.
She will receive overtime pay when working more than 10 hours during a
shift.
3. She only receives overtime if she works past 40 hours in any given week.


4.

She is not eligible for overtime pay.

___________________ is required under the Davis-Bacon Act for
companies who do business with the Federal government.
1.
2.
3.
4.

Manual payroll.
Certified payroll.
Outsourced payroll.
Computerized payroll.

What is the most significant challenge pertaining to payroll that
small businesses face?
1.
2.
3.
4.


2.
3.
4.

They receive more company benefits than other workers.
They are not subject to any provisions of payroll laws.
They may not work any overtime hours.
They must provide proof of employment insurance before commencing
work.

Congress passed the __________________ and
_________________ were passed to assist displaced workers.
1.
2.
3.
4.

16th Amendment; Fair Labor Standards Act.
Social Security Act; Medicare Act.
Federal Unemployment Tax Act; Social Security Act.
Federal Income Contributions Act; Federal Unemployment Tax Act.


Employers must request a(n) ________________________ for
the Internal Revenue Service to track a firm’s payroll tax
obligations.
1.
2.
3.
4.

Paycards represent a trend in employee compensation that
alleviates the employee’s need for:
1.
2.
3.
4.

Filing data about time worked.
Bank account establishment.
Functional literacy.
Workplace competence.

Why is outsourced payroll popular among accounting
professionals?
1.
2.
3.
4.

Ease of use.
Data accuracy.
Time reduction.
Records retention.

What is the difference in pay practices between salaried exempt
and salaried nonexempt workers?
1.
2.
3.
4.

Certification and bonding of payroll personnel.

Jonah is one of the payroll accountants in a company that
specializes in custom work for each customer. His biggest payroll
challenge is accurate allocation of labor to jobs. Which of the
following represents the most accurate option to track the
company’s labor costs?
1.

Handwritten time slips on which the employee documents the times worked
on each job.
2. Verbal reporting via telephone of time worked per job.
3. Computer log-ins when employees change tasks.
4. Radio-frequency time cards to track time allocations.

Companies may use _____________ and ____________ to allow
employees to have secure, rapid access to their compensation.
1.
2.
3.
4.

Cash; Checks.
Cash; Direct Deposit.
Direct Deposit; Paycards.
Paycards; Checks.

The ________________modified the statute of limitations
imposed by the Equal Pay Act of 1963.
1.

4.

Accuracy of employee-entered data.
Employer oversight of stored data.
Employee website navigation issues.
Security of personnel data.

Jeremiah is a salaried exempt worker whose standard workday
consists of eight-hour shifts. During a workweek, he exceeded
eight hours of work on two separate days. What is the FLSA
provision for the time that he worked past eight hours in a single
day?
1.

He must be compensated at overtime rates for any hours past eight in a
single day.
2. He must reduce the time he works on subsequent days.
3. He must alert his manager of the extra time on the next business day.
4. He will receive no additional compensation for the extra time worked.

The ethical principle of ___________ concerns what is right and
just for all parties involved.
1.
2.
3.
4.

Due Care.
Integrity.
Public Interest.