FPC Domain 1: Core Payroll Concepts Welcome to your FPC Domain 1: Core Payroll Concepts 1. FPC: Core Payroll Concepts When calculating overtime pay under the Fair Labor Standards Act (FLS A. which of the following types of compensation must be included in the regular rate of pay? A) Discretionary bonuses B. Gifts C. Nondiscretionary bonuses D. Reimbursements for expenses None 2. FPC: Core Payroll Concepts Under the FLSA, which of the following employees is most likely to be classified as exempt? A. An employee who primarily performs manual labor B. An employee who is paid on an hourly basis C. An employee performing office or non-manual work that directly relates to management or general business operations D. An employee whose work is closely supervised None 3. FPC: Core Payroll Concepts Which of the following best describes the term "constructive payment"? A. The actual transfer of cash from employer to employee B. The point at which an employee has control over the wages, even if not actually received C. A payment made by an employer on behalf of the employee for tax purposes D. A deduction from employee's pay required by court order None 4. FPC: Core Payroll Concepts The term "aggregate method" refers to a specific procedure used for: A. Calculating net pay B. Determining the amount of federal income tax withholding on supplemental wages C. Summarizing annual payroll data for reporting purposes D. Allocating employee benefits costs None 5. FPC: Core Payroll Concepts What is the primary purpose of the Form W-4? A. To report an employee's annual wages and taxes withheld B. To verify an employee's eligibility to work in the United States C. To determine the amount of federal income tax to withhold from an employee's pay D. To request a duplicate W-2 form None 6. FPC: Core Payroll Concepts Which of the following payroll records must be retained for at least three years under the FLSA? A. Payroll tax returns B. Employee time cards C. I-9 forms D. Employee benefit plan information None 7. FPC: Core Payroll Concepts In payroll, "grossing up" refers to: A. Increasing an employee's gross pay to cover the cost of taxes on a bonus B. Calculating the total cost of employee benefits C. Adjusting gross pay for inflation D. Correcting errors in previous pay periods None 8. FPC: Core Payroll Concepts The "percentage method" for calculating federal income tax withholdings applies to: A. Only annual bonus payments B. Wages after deduction of allowances claimed on Form W-4 C. All taxable fringe benefits D. Supplemental wages only None 9. FPC: Core Payroll Concepts Which of the following is true about the Social Security tax as it relates to payroll? A. It is only imposed on the employee B. There is no wage base limit for Social Security tax C. It is imposed on both the employer and the employee up to a certain wage base limit D. Employers are not required to match the Social Security tax paid by employees None 10. FPC: Core Payroll Concepts When must an employer deposit federal income tax withheld and both the employer and employee portions of Social Security and Medicare taxes? A. Annually on December 31 B. By the end of the filing quarter C. According to the employer's federal tax deposit schedule D. Within 7 days of each payroll date None 11. FPC: Core Payroll Concepts What does the term "SUTA dumping" refer to? A. The process of allocating state unemployment taxes to the employee B. A legal strategy to minimize state unemployment tax rates C. The practice of manipulating payroll data to achieve a lower state unemployment tax rate D. The transfer of employees between related entities to use the lowest state unemployment tax rate None 12. FPC: Core Payroll Concepts For FICA tax purposes, what is the significance of the "wage base limit"? A. It is the minimum amount of wages that are exempt from taxes. B. It represents the maximum amount of earnings subject to the Social Security tax. C. It is the threshold above which employees no longer pay Medicare tax. D. It determines the rate at which FICA taxes are calculated. None 13. FPC: Core Payroll Concepts Which of the following best describes the term "year-to-date" 'YTD' in payroll? A. The amount of taxes withheld from the employee's last paycheck. B. The cumulative amount of earnings and deductions for an employee within the current calendar year. C. The projected annual earnings based on the current pay period's salary. D. The total amount of benefits utilized by an employee in a given year. None 14. FPC: Core Payroll Concepts What is the primary purpose of the Electronic Federal Tax Payment System (EFTPS)? A. To file federal tax returns electronically. B. To electronically report new hires to the state. C. For employers to pay federal taxes online. D. To apply for an employer identification number (EIN). None 15. FPC: Core Payroll Concepts In payroll, the "golden parachute" payment refers to: A. Compensation for executives in case of a merger or takeover. B. Bonus payments for achieving company-wide performance goals. C. Severance pay for hourly employees. D. Retirement benefits exceeding $1 million. None 16. FPC: Core Payroll Concepts Which of the following is a requirement for an employee to qualify for the "simplified method" for home office deductions? A. The home office must be used exclusively for business activities. B. The employee must not receive any form of reimbursement for home office expenses. C. The home office must be located outside of the employee's residence. D. The employee must be a full-time remote worker. None 17. FPC: Core Payroll Concepts What does the term "fringe benefits" include? A. Only health insurance and retirement plans provided by the employer. B. Any wages paid directly to an employee as overtime. C. All forms of pay other than direct wages, including benefits like health insurance, company cars, and educational assistance. D. Only educational assistance and employee discounts. None 18. FPC: Core Payroll Concepts Under the IRS guidelines, which of the following employees is most likely to be classified as an independent contractor? A. An employee who works under the direct supervision and control of the employer. B. An individual who provides services that are a key aspect of the business. C. An individual who sets their own hours and retains control over how the work is completed. D. An employee who receives a steady salary and benefits. None 19. FPC: Core Payroll Concepts The term "backup withholding" refers to: A. The withholding of federal taxes at a flat rate due to underpayment of taxes in the previous year. B. The additional withholding ordered by a court for child support. C. The mandatory withholding of taxes on certain payments when the payee fails to provide a Taxpayer Identification Number (TIN). D. The withholding of state taxes when an employee exceeds a certain income threshold. None 20. FPC: Core Payroll Concepts What is the main purpose of the Form 940? A. To report and pay FICA taxes. B. To report wages paid and federal income tax withheld from employees. C. To report annual Federal Unemployment Tax Act 'FUTA' tax. D. To register a new employee for state unemployment insurance. None 21. FPC: Core Payroll Concepts In the context of payroll, what does the term "levy" refer to? A. The process of adjusting employee benefits annually. B. A legal seizure of an employee's wages to satisfy a debt. C. The annual review of payroll systems for compliance. D. The setting of wage levels by industry standards. None 22. FPC: Core Payroll Concepts Which of the following is considered a compensable time for non-exempt employees under the Fair Labor Standards Act 'FLSA'? A. Commuting time from home to work B. Voluntary participation in a wellness program outside of normal hours C. Time spent on call at the employer's premises D. Lunch breaks where the employee is free to leave the premises None 23. FPC: Core Payroll Concepts In payroll processing, which of the following best describes the "payroll cycle"? A. The period over which employee performance is evaluated for raises B. The interval at which employees receive their paychecks C. The annual period used for calculating taxes D. The time it takes to process a single payroll from start to finish None 24. FPC: Core Payroll Concepts Which payroll record is essential for complying with the Equal Pay Act 'EPA'? A. Time and attendance records B. Job classifications and wage rate records C. Employee benefits enrollment forms D. Performance review documents None 25. FPC: Core Payroll Concepts What is the primary function of the Form I-9 in the payroll process? A. To determine the amount of federal income tax to withhold B. To verify an employee's eligibility to work in the United States C. To report an employee's wages to the state unemployment agency D. To enroll an employee in health insurance benefits None 26. FPC: Core Payroll Concepts What does the term "net pay" refer to in payroll terminology? A. The total amount of earnings before any deductions B. The amount of money an employee earns in a year C. The amount of an employee's paycheck after all deductions are taken D. The total amount spent by the employer on employee compensation None 27. FPC: Core Payroll Concepts Under the Affordable Care Act 'ACA', what is the significance of the term "full-time employee" for employers? A. It determines eligibility for overtime pay. B. It identifies employees eligible for retirement benefits. C. It affects the calculation of payroll taxes. D. It determines which employees must be offered health insurance. None 28. FPC: Core Payroll Concepts The process of "garnishment" in payroll involves: A. Increasing an employee's gross pay to offset taxes B. Automatically enrolling employees in a company's retirement plan C. Withholding a portion of an employee's earnings for the payment of a debt D. Adjusting employee hours to avoid overtime pay None 29. FPC: Core Payroll Concepts For purposes of payroll, the term "exempt employee" refers to an employee who: A. Is not subject to the minimum wage provisions of the FLSA B. Is exempt from payroll taxes C. Is not eligible for overtime pay under the FLSA D. Does not have taxes withheld from their paycheck None 30. FPC: Core Payroll Concepts Which of the following best describes the purpose of the "New Hire Reporting Program" in the United States? A. To enroll new employees in health insurance and retirement plans B. To ensure compliance with child support enforcement efforts C. To track employment trends for economic analysis D. To calculate the correct amount of federal income tax withholding None 1 out of 30 Time is Up! Time's up
