Questions and Answers of Payroll Accounting 2023

Fannon’s Chocolate Factory operates in North Carolina. Calculate the state income tax for each employee using the state income tax rate of 4.99 percent. Assume that no pre-tax deductions exist for
Which of the following is true about employee pay methods?a. Employees must be able to access the full amount of their net pay on the pay date.b. Employers must keep a record of all pay
What are the advantages and disadvantages of paycards?
What are the two methods payroll accountants use to determine federal income tax withholding amounts?a. Percentage methodb. Salary-bracket methodc. Wage-salary methodd. Wage-bracket method
Which of the following is true about child support garnishments?a. They are based on gross pay.b. The garnishment may be as high as 65 percent.c. Only the minimum wage amount of an employee’s pay
Using the wage-bracket method for manual payroll systems with Form W-4 from 2020 or later in Appendix C, calculate the federal withholding amounts for the following employees. No box was checked in
How does the percentage method work using Form W-4 information? W-4 Department of the Treasury Internal Revenue Service Form Step 1: Enter Personal Information Step 3: Claim Dependents (a) First name
What are two examples of garnishments?
How does cryptocurrency function as a payroll payment method?
Campbell Whitman works for Schaum, Whitney, & Matte, LLP, in Washington, DC, which pays employees on a biweekly basis. Campbell’s annual salary is $160,000. The company began operations in
Of the following taxes, which one(s) is/are examples of mandatory and voluntary employee deductions?a. Social Security taxb. Employee federal income taxc. FUTAd. 401(k) contributions
Burton Book Memorabilia is a semiweekly depositor. Following a special project’s success, Keller Burton, the owner, pays each of the 250 employees a $2,000 bonus on August 12, 2022. Assume a 22
In Shavertown, Pennsylvania, the Wilkes-Barre Bookkeeping LLC owner was indicted for embezzling over $376,225 of his clients’ payroll tax remittances between 2010 and 2016 and for lying to clients
What are an advantage and a disadvantage of direct deposit?
At what income level do many employees contribute an additional percentage to their Medicare tax deduction?a. $128,400b. $150,000c. $175,000d. $200,000
You are the new accountant for a start-up company, Peaceful Skunk Builders. The company has cross-country drivers, warehouse personnel, and office staff at the main location. The company is looking
You are preparing a training session for your colleagues about payroll check fraud. Which of the following may be indicators of check fraud?a. Changes in font type between company address and
You have been retained as a consultant for Marionet Industries. The company has had difficulty with its cross-country drivers receiving their pay in a timely manner because they are often away from
Which of the following is/are examples of fringe benefits?a. Education assistance (up to $5,250 annually)b. Dependent care assistance (up to $5,000 annually)c. Vacation packagesd. Retirement planning
Shiloh is an employee at Jankoski Cycles and earns a salary of $37,765 annually, paid semimonthly. Shiloh contributes to the following fringe benefits and other deductions:• Medical insurance: $220
How is disposable income computed?a. Gross pay less pre-tax deductionsb. Gross pay less pre-tax deductions and income taxesc. Gross pay less mandatory deductionsd. Gross pay less Social Security and
Hayden is an employee at Finesong Jewelry and earns a salary of $38,850 per year, is paid biweekly, and has a credit card garnishment. Assuming that Hayden’s disposable income is 85 percent of the
Jamie is the payroll accountant of Central Communications who is researching retirement plan options for the employer. Central Communications has 135 employees and is a for-profit company. Which of
River, president of Miller Custom Coffee Roasters, drives a 2021 Mercedes E300 with a fair market value of $57,500. The lease value is $14,750. The odometer started at 655 and was reported at 32,855
Casey is the payroll accountant for Glowing Yoga and is preparing a Section 125 cafeteria plan presentation. Which of the following items may qualify for inclusion in a cafeteria plan?a. Health
Shiloh is a sales representative for American Silk Mills who has a company car to visit customer sites. Shiloh drove 25,500 miles during 2022, of which 15 percent was reported as personal miles.
Grey is an employee of Convergent Technologies whose job is strictly based in the company’s office. The employer has authorized the use of a company vehicle for commuting purposes as necessary.
Jacinta is an employee of Wilson In-Home Healthcare. Jacinta has a company vehicle to drive to customer sites. Which of the general valuation rules would be appropriate to compute the value of the
What are two examples of pre-tax deductions?
Can employers charge employees for their uniforms? Check out the U.S. Department of Labor video at https://www.youtube.com/watch?v=PoZCux0rTN8&feature=youtu.be
Lane is an employee in the office of Salvaggio & Wheelers, Attorneys at Law, who received the following benefits during 2022:• Medical insurance: $250 per month• Commuter pass: $500 per
Marlow is an employee of All-Adventure Tours. All-Adventure Tours offers tuition reimbursement as a fringe benefit. What maximum amount may be excluded from Marlow’s taxes as a fringe benefit?a.
Jona is an employee at Radiance Senior Living and received the following benefits from the employer during 2022 on the company’s location for company purposes:• Personal protective equipment: $50
Velshi is an employee who receives educational assistance from their employer in the amount of $15,000 per year. How is this amount treated for tax purposes?a. None of it is taxableb. All of it is
Windsor is employed at Rockstar Music. Windsor is receiving education assistance of $5,750 per year from Rockstar Music to complete a bachelor’s degree from an accredited college. How much of that
What is the annual maximum amount that an employee may contribute to a flexible savings arrangement before it becomes taxable income?a. $2,650b. $2,750c. $2,850d. $2,950
Keren is an employee of Dimensionworks Designs in New Mexico who received the following achievement awards from her employer during 2022:• Best safety plan, Santa Fe County: $1,200• Top emergency
What is a significant difference between flexible spending arrangements (FSAs) and health savings accounts (HSAs)?a. Only FSAs may be included as part of a cafeteria plan.b. HSAs may accompany any
What are the two reports associated with fringe benefits?
Rowan’s employer offers the option to use the cents-per-mile rule instead of the leasevalue rule for 2022. Which method will yield the lower gross income for Rowan? (1) Automobile FMV $0 to
Go to www.benefitspro.com and search for benefits-related podcasts. Once you have listened to one or more podcasts, describe the insights you gained from the information presented?
Tate is a manager at Complex Ventures, Inc. Tate contributes $2,750 annually to an FSA and has medical insurance with a $500 monthly premium. Tate earns a salary of $72,200 and is paid biweekly. What
Which of the following is a co-requisite of a health savings account (HSA)?a. No employer-provided insuranceb. A high deductible health planc. Multiple health insurance plans held by the same
Addison is a graphic designer at a large marketing firm and earns $56,000 annually, paid biweekly. Addison contributes 5 percent of the gross pay to a qualified 401(k) plan on a pre-tax basis and has
Garrett is wondering what elements are in a qualified health plan. Which of the following would be included?a. Mental health benefitsb. Prescription drugsc. Pet insurance premiumsd. Preventive and
Using a site such as Google, Yahoo, or Safari, search for the term “fringe benefits.” Sites such as HR360 and Employee Benefit Adviser contain insights into fringe benefits and guidance about the
Quinn is employed as a concierge at Strawberry Lodge, an upscale resort in the Adirondack Mountains. Quinn asks the payroll accountant which deductions from gross pay are considered voluntary fringe
Taylor is an employee of New York Boutiques, Inc., and is a traveling salesperson who routinely meets with customers at their places of business. Which of the following fringe benefits would be
Emery is a computer programmer at Biosphere Communications. Emery has a garnishment for child support and would like to pay it personally, and not have it automatically withdrawn from the gross pay.
Dev is a metalworker at Bartleby’s Metal Shop. Which of the following would likely be fringe benefits that the employer would provide because they would be needed as part of this job?a.
Health insurance is a rapidly changing and evolving field. Employers have many options and concerns to consider. Check out www.npr.org/sections/health-care/ to listen to podcasts about health
Rowan M. is a sales employee of Carefree Pools and Spas, Inc. In 2022, he was issued a company car with a fair market value of $35,000 and drove a total of 22,000 miles; used the car for 2,000 miles
Robin is a new employee at Big Tech Computers and is debating whether to enroll in a POP with the opportunity for an FSA or an HDHP with an opportunity for an HSA. The POP premium is $550 per month
Parker is a salaried, nonexempt administrator for Forise Industries and is paid biweekly. The annual salary is $63,000 with a standard workweek of 40 hours. During the pay period ending February 4,
Which of the following fringe benefits is exempt from federal income tax but subject to FICA tax?a. Moving expense reimbursementsb. Tuition reduction for undergraduate educationc. Adoption
Sargent is a new employee at Tet Torr Entertainment. The company has both a POP with the opportunity for an FSA or an HDHP with an opportunity for an HSA. The POP premium is $350 per month and the
Nigel is a waiter at Albicious Foods in South Carolina. Nigel is single with one other dependent and receives the standard tipped hourly wage. During the week ending October 22, 2022, 44 hours were
Houda is a children’s photographer for Cool Cax Digital and would like advice about using an FSA for miscellaneous prescriptions and other medical expenses. What reason(s) would you give Houda for
How must tipped employees report the tips they receive each month?
What amount did the Final Rule stipulate as to the minimum wage for salaried workers?
Preethi is a salaried, nonexempt administrative assistant and is paid semimonthly. Preethi is married filing joint with five dependents under 17. Annual salary is $65,000 with a standard work week of
What is one of the three methods for employees to receive retroactive pay?
What is comp time?
A 19-year-old accounting clerk with Quijen Accounting Solutions (there is not a state minimum wage) received $369.75 for the first biweekly pay covering 87 regular hours. Did the employer pay the
Parker is the concierge at the Trans-Canada Resort in Michigan. Parker is single with one other dependent and receives the standard tipped hourly wage for the state. During the week ending June 4,
Ret is an employee earning a base salary of $27,200 plus an 8 percent commission on all sales. Ret is married filing joint with four dependents, three under 17 and one other. During the biweekly pay
Jude is a full-time student working in the library at Sioux City College in Sioux City, Iowa. What is the minimum hourly wage that Jude may receive?1. $7.25 per hour2. $6.50 per hour3. $6.16 per
Averill is 18 years of age, and a new employee in Hendersonville, Tennessee. What is the minimum hourly wage that may be received during the first 90 days of employment?1. $9.47 per hour2. $2.13 per
Each of the following workers is a piece-rate worker at Golden Boats in Connecticut. If the employees have a standard 40-hour workweek, what is their effective hourly wage? Based on the state’s
Carranza, a nonexempt salesperson with Verent Enterprises, earns a base annual salary of $30,000 with a standard 40-hour workweek. In addition, a 3 percent commission on all sales during the pay
Cax is an hourly employee, single with no dependents, and earns $16.25 per hour. During a biweekly pay period ending February 18, Cax worked 88.5 hours. Complete the payroll register with the
A piece-rate employee receives $30 for each desktop computer assembled and has a standard 40-hour workweek. During the weekly pay period ending December 16, 48 computers were assembled during 44
Of the items in the following list, which one(s) should appear in a payroll register?1. Name2. Home address3. Shifts worked4. Hours worked
Shona, an outside sales representative for Marosh Communications, receives a 20 percent commission on all new marketing packages sold within the sales territory. During the week of April 8, there
A shared employee for Tetra Computers works in both the programming and the research departments for the company and splits their time equally in both roles. In the programming department, the
Beasley is a salaried nonexempt accounting clerk contracted to work 40 hours per week. How should overtime be determined, according to FLSA?1. Any hours worked in excess of 40 during a consecutive
Terry, a single employee with two dependents under the age of 17, is paid $12 per hour and receives a commission on net sales. No commission is received until net sales exceed $150,000. Once the
According to the FLSA, what is the basis used to determine overtime worked for standard nonexempt workers?1. The 8 and 80 rule2. The excess over 40 hours during any pay period3. The excess over 40
Peta is married, filing joint with two other dependents, is paid $17.25 per hour, and receives commission on sales. No commission is paid out until sales exceed $60,000. Once the minimum sales have
What are the two methods an employer may use to determine a tipped employee’s overtime compensation?1. Compute gross pay based on the minimum cash wage plus tips.2. Compute gross pay based on an
Janel is a nurse at Central City Hospital and is paid $32.50 per hour for a 40-hour standard workweek. During the biweekly pay period from January 10–21, Janel worked a total of 87 hours. What is
The accounting clerk at Tenity Enterprises is paid $18.15 per hour. During a week’s pay period, the employee worked 39 hours and 41 minutes. Based on a hundredth-hour pay method, what is the gross
Iskander is the concierge at Hotel Amize and is a nonexempt employee earning $18 per hour plus a $250 biweekly bonus based on customer reviews. During the pay period of November 27–December 10, 85
Cheryl completed designing 22 custom cakes on her 18-cake contract as an employee of Yuan Fox Wedding Planners. There is a bonus earned if the individual exceeds 145 percent of their piece-rate
Doree is a stocker at a factory outlet, paid hourly earning $12.45 per hour. During a one-week period, Dorree worked 39 hours and 19 minutes. How much would the gross pay be under the quarter-hour
The payroll accountant needs to compute net pay for the employees for Hay Industries. Place the following steps in the proper order.a. Compute income taxes.b. Subtract pre-tax deductions from gross
Compute the net pay for Mehdi Gamal and Deion Green. Assume that they are paid biweekly, subject to federal income tax (use the wage-bracket method in Appendix C) and FICA taxes, and have no other
For the February 4, 2022, pay period, use the gross pay totals from the end of Chapter 3 to compute each employee’s net pay. Once you have computed the net pay (use the wage-bracket tables in
The payroll accountant needs to compute net pay for the employees of Happy Crab Marketing. Place the following steps in the proper order after the determination of gross pay has been completed.a.
How should employees complete their Form W-4 if they have multiple jobs or have a spouse who works? W-4 Department of the Treasury Internal Revenue Service Form Step
Teton Tours in Evanston, Wyoming, has six employees who are paid on a biweekly basis. Calculate the net pay from the information provided for the July 16 pay date. Assume that all wages are subject
For the Critical Thinking problems, use the following steps to compute the gross-up amount:1. Compute tax rate: The tax rate on bonuses is 22 percent. Social Security (6.2 percent) and Medicare taxes
The state of Kansas passed legislation that allowed employers to select their employee pay method. The legislation was known as the “paperless payroll law,” and many employers opted to give their
Did you know that you can use an online calculator to see how your voluntary deductions will affect your paycheck? Many different payroll calculators exist. Go to one or more of the following sites
Kit is reviewing benefits with you, the payroll accountant for Silly Lemon Films. Classify the following benefits as pre-tax or post-tax deductions and as taxable or tax-exempt for federal income
The owner of Padua Products wants to reward the employees for their work during the year and asked you to gross-up their bonuses so that they receive the full amount as net pay. What amount(s) should
Dallas is the payroll accountant at White Box Builders and is preparing an information package about voluntary and fringe benefits. Using the following list of fringe benefits, classify each benefit
The payroll accountant has received a court order for garnishment for an employee’s student loan payments. What must be considered in computing the garnishment?a. Year-to-date payb. Hourly wagec.
Jesse is the payroll accountant for Comptech Industries whose employer decided to use the special accounting rule for 2022. Which months may be included in the special accounting rule?
Which of the following are always post-tax deductions?a. Garnishmentsb. Qualified health insurancec. Charitable contributionsd. Retirement plan contributions

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