Which of the following is not allowed as part of a company’s prehire inquiries:
a. Past employment and experience records
b. Social security numbers
c. Lie detector tests
d. Educational background
e. List of references
If an employee works two jobs at two different wage rates for the same employer
during the same pay week, any overtime pay must be calculated by using an overtime
hourly rate of:
a. one and onehalf the higher of the two wage rates.
b. one and onehalf the lower of the two wage rates.
c. onehalf of the higher of the two wage rates.
d. onehalf of the two rates combined.
e. none of the above.
If the third decimal place is less than 5, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that
follow.
Refer to Instruction 31. On the last weekly pay of the first quarter, Lorenz is paid her
current pay of $90 per day for four days worked and one day sick pay (total—$450).
She is also paid her first quarter commission of $1,200 in this pay. How much will be
deducted for:
a)OASDI tax __________
b)HI tax __________
Instruction 51
Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.
Refer to Instruction 51. Aaron Norman earned $24,900 for the year from Marcus
Company. The company is subject to a SUTA tax of 4.7% on the first $9,900 of
earnings. Determine:
a)the employer’s FUTA tax on Norman’s earnings __________.
b)the employer’s SUTA tax on Norman’s earnings __________.
Under the Federal Personal Responsibility and Work Opportunity Reconciliation Act,
every employer is required to report the name, address, and social security number of
each new employee to the appropriate state agency.
a. True
b. False
Form 941 is used by employers to make their quarterly return of FICA taxes and
withheld income taxes.
a. True
b. False
Advance payments for work done in the future are not taxable wages for FUTA
purposes.
a. True
b. False
A stated percentage of revenue paid an employee who transacts a piece of business or
performs a service is called:
a. a piece rate.
b. a commission.
c. a regular hourly rate.
d. a remunerative salary.
e. none of the above.
Evers, who works for two employers, is entitled to three personal allowances. Evers
must claim the three allowances with each of the two employers during the entire
calendar year.
a. True
b. False
HTMLENTITY#8203HTMLENTITYWhich of the following Acts established the
Equal Employment Opportunity Commission (EEOC)?
a. HTMLENTITY#8203HTMLENTITYAmericans with Disabilities Act
b. HTMLENTITY#8203HTMLENTITYImmigration Reform and Control Act of 1986
c. HTMLENTITY#8203HTMLENTITYCivil Rights Act of 1964
d. HTMLENTITY#8203HTMLENTITYAge Discrimination in Employment Act
e. HTMLENTITY#8203HTMLENTITYNone of the above
Noncash items given to household employees by their employers are subject to FICA
tax.
a. True
b. False
The FICA tax rates for the selfemployed 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.
If wages are paid weekly, postings to the employee’s earnings record would be done
once a month.
a. True
b. False
The amounts needed for the payroll entries in the journal come from the employee’s
earnings record.
a. True
b. False
Which of the following is not a factor considered in determining coverage of interstate
employees?
a. Location of base of operations
b. Place where work is localized
c. Location of company’s payroll department
d. Location of employee’s residence
e. Location of place from which operations are controlled
If the third decimal place is less than 5, drop the third decimal place.
Also, use the minimum hourly wage of $7.25 in solving these problems and all that
follow.
Refer to Instruction 31. Dee is paid $2,345 on November 8, 20. Dee had cumulative
gross earnings, including overtime pay, of $125,900 prior to this pay.
a)The amount of OASDI taxes to withhold from Dee’s pay is __________.
b)The amount of HI taxes to withhold from Dee’s pay is __________.
The employer’s payroll tax expenses are recorded by all employers at the time these
taxes are actually paid.
a. True
b. False
The highest paid executives of a firm are excluded from coverage under the Federal
Insurance Contributions Act (FICA).
a. True
b. False
All interns in the forprofit sector are exempt from the minimum wage and overtime
requirements of the FLSA.
a. True
b. False
HTMLENTITY#8203HTMLENTITYWhich of the following is a provision of the Fair
Labor Standards Act (FLSA)?
a. HTMLENTITY#8203HTMLENTITYSets up minimum wage
b. HTMLENTITY#8203HTMLENTITYTax on net earnings of selfemployed
individuals
c. HTMLENTITY#8203HTMLENTITYAllows discrimination in hiring
d. HTMLENTITY#8203HTMLENTITYSeparate tax on employees and employers
e. HTMLENTITY#8203HTMLENTITYAll are provisions of the FLSA
Cash tips of $20 or more received by a tipped employee in a calendar month are treated
as remuneration subject to federal income tax withholding.
a. True
b. False
Form I9, 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.
Under the Federal Insurance Contributions Act, the Medicare portion of the tax is only
paid by the employer.
a. True
b. False
HTMLENTITY#8203HTMLENTITYAll of the following are covered by the Age
Discrimination in Employment Act except:
a. HTMLENTITY#8203HTMLENTITYLabor Unions
b. HTMLENTITY#8203HTMLENTITYAn employer with 15 employees
c. HTMLENTITY#8203HTMLENTITYState government employees (other than
elected officials)
d. HTMLENTITY#8203HTMLENTITYEmployment Agencies
e. HTMLENTITY#8203HTMLENTITYAll of the above are covered
Amounts withheld from employees’ wages for health insurance are credited to a liability
account.
a. True
b. False
The Wage and Hour Division allows the practice of recording an employee’s starting
and stopping time to:
a. the nearest five minutes.
b. the nearest tenth of an hour.
c. the nearest quarter of an hour.
d. all of the above.
e. none of the above.
An aspect of the interstate reciprocal arrangement concerns:
a. the status of Americans working overseas.
b. the taxability of dismissal payments.
c. the determination of an employer’s experience rating.
d. the transfer of an employee from one state to another during the year.
e. none of the above.
An employer can use a credit card to pay the quarterly deposit of FUTA taxes during the
year.
a. True
b. False
When you pay supplemental wages at the same time as regular wages, the method of
calculating the withholding is the same for vacation payments as for semiannual
bonuses.
a. True
b. False
Questions pertaining to religion, gender, national origin, or age are allowed on
application forms when these are bona fide occupational qualifications for a job.
a. True
b. False
A person holding two jobs may have additional income tax withheld by increasing the
number of withholding allowances claimed.
a. True
b. False
The mailing of Form 940 is considered timely if it is postmarked on or before the due
date.
a. True
b. False
Under the continental system of recording time, 9:00 a.m. is recorded as 900 while 9:00
p.m. is recorded as 2100.
a. True
b. False