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2023 CPP Certified Payroll Professional Exam Practice
Form SS-8 correct answer Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding Form W-9 correct answer First, it is used by third parties to collect identifying information to help file information returns with the IRS. The form is never actually sent to the IRS, but is maintained by the person who files the information return for verification purposes. The information on the Form W-9 and the payment made are reported on a Form 1099. The second purpose is to help the payee avoid backup withholding. The payer must collect withholding taxes on certain reportable payments for the IRS. However, if the payee certifies on the W-9 they are not subject to backup withholding they generally receive the full payment due them from the payer. This is similar to the withholding exemptions certifications found on Form W-4 for employees. Form SS-5 correct answer Apply for an original Social Security card Apply for a replacement Social Security card Change or correct information on your Social Security number record Form SS-4 correct answer Application for Employer Identification Number (EIN) Accounting equation (Balance Sheet) correct answer Assets = Liabilities + Capital Assets - Liabilities = (Shareholders' or Owners' Equity) Asset (Debit or Credit Normal Balance?) correct answer Debit
Expense (Debit or Credit Normal Balance?) correct answer Debit Liability (Debit or Credit Normal Balance?) correct answer Credit Capital (Debit or Credit Normal Balance?) correct answer Credit Owners Equity (Debit or Credit Normal Balance?) correct answer Credit Revenue (Debit or Credit Normal Balance?) correct answer Credit Escheat laws correct answer Refer to unclaimed property obligations. Companies who issue checks-for wages, payroll, employee commissions, returnable garnishments, deferred compensation, payroll services or bonuseshave a potential (and probable) unclaimed property obligation. Schedule D (Form 941) correct answer to explain certain discrepancies (caused by acquisitions, statutory mergers, and consolidations) between Forms W-2, Wage and Tax Statement (Copy A), and Forms 941, Employer's QUARTERLY Federal Tax Return, for the totals of social security wages, Medicare wages and tips, social security tips, federal income tax withheld, and advance earned income credit (EIC) payments Workweek for 14 and 15-year-olds correct answer Outside school hours, and on school days including Fridays, no more than 3 hours. No more than 8 hours on a non-school day. When school is in session, no more than 18 hours per week. No more than 40 hours during a week when school is out. Between the hours of 7 a.m. And 7 p.m, extended to 9 p.m. Between June 1 and Labor Day. Which form is used for Determination of Employee Work Status for Purposes of Federal Employment Taxes and Income Tax Withholding?
C. Minimum Wage Rates D. 8 hour work day correct answer D Agent-drivers, commission-drivers and full-time life insurance salespersons are which of the following? A. Statutory Employees B. Statutory Nonemployees C. Employees D. Independent Contractors correct answer A There are three parts of the ABC test, which is not one of them? A. Business-unusual and/ or away B. Risk of loss C. Customarily independent contractor D. Absence of control correct answer B Under the federal new hire reporting requirement how many days does an employer have after hire date? A. 10 days B. 20 days C. 30 days D. 40 days correct answer B What is Form I-9 used for? A. Application for Employer Identification Number B. Determination of Employee Work Status C. Application for IRS Individual Taxpayer D. Employment Eligibility Verification correct answer D
Under the reasonable basis test, which of the following does not support an employer's treatment of a worker as an independent contractor? A. Past IRS employment tax audit B. Published IRS rulings C. Place of work D. Private letter rulings correct answer C What does FLSA stand for? A. Federal Labor Standards Act B. Fair Labor Standards Act C. Federal Labor Standards Agency D. Fair Labor Standards Agency correct answer B Which of the following is not covered under the FLSA? A. Regulate how often employees must be paid B. Mandates equal pay for equal work C. Requires recordkeeping by employers D. sets the minimum wage and overtime rates employees must receive for their work correct answer A Who enforces the Federal Wage-Hour Law? A. Individual States B. IRS C. EEOC D. DOL correct answer D Who enforces the equal pay provisions?
C. 27.63 per hour D. 29.67 per hour correct answer C What is the federal minimum wage rate? A. 4. B. 5. C. 6. D. 7.25 correct answer D So long as the employee's tips are enough to make up the remainder of the minimum hourly wage What is the federal minimum wage for tipped employee? A. 2. B. 2. C. 2. D. 2.13 correct answer D What is the time limit on filing an FLSA complaint with the Wage and Hour Division? A. 1 or 2 years B. 2 or 3 years C. 3 or 4 years D. 4 or 5 years correct answer B A "working condition" fringe benefit is? A. Discount offered employees that's not more than 20% of the price for services offered to customers B. A service or an item of such small value as to make accounting for the benefit unreasonable C. A service the employee could deduct as a business expense if he or she had paid for it D. Services provided free or at reduced rates by an correct answer C
A "de minimis" fringe benefit is? A. Discount offered employees that's not more than 20% of the price for services offered to customers 20% of the price for services offered to customers B. A service or an item of such small value as to make accounting for the benefit unreasonable C. A service the employee could deduct as a business expense if he or she had paid for it correct answer B A "Qualified employee discount" is? A. Discount offered employees that's not more than 20% of the price for services offered to customers 0 B. A service or an item of such small value as to make accounting for the benefit unreasonable C. A service the employee could deduct as a business expense if he or she had paid for it correct answer A A "No-additional-cost services" is? A. Discount offered employees that's not more than 20% of the price for services offered to customers B. 20% of the price for services offered to customers C. A service or an item of such small value as to make accounting for the benefit unreasonable D. A service the employee could deduct as a business expense if he or she had paid for it correct answer D What is the maximum amount excluded from income by law in 2023 for employer-provided parking? A. $240. B. $265. C. $280. D. $300.00 correct answer D
An employee is temporarily disabled and is being paid by a third party who is not an agent To request federal income tax withheld from third-party sick pay, which of the following form must be completed? A. Form W- B. Form W-4P C. Form W-4S D. Form W-5 correct answer C On what form must wages be reported on if an employee dies after receiving a paycheck but before cashing it and the check is reissued to the employee's personal representative? A. Form W-2D B. Form W- C. Form 1099-MISC D. Form 1099-R correct answer B Wages paid after the year of death are subject to what withholding taxes? A. Social Security, Medicare, Federal income tax and FUTA B. Social Security, Medicare and FUTA C. Social Security, Medicare D. None correct answer D The IRS approved rate for employer provided fuel for 2023 is? A. 5.5 cents per mile B. 58.5 cents per mile C. 62.5 cents per mile D. 65.5 cents per mile correct answer A
Which of the following is not a recordkeeping requirement for business use of company provided vehicles? A. Trips mileage B. Trips date C. Trips usage of car phone D. Business purpose of the trip correct answer C Wages paid after the year of death are report on which of the following form? A. Form W-2D B. Form W- C. Form 1099-MISC D. Form 1099-R correct answer C The IRS standard business mileage rate for 2023 is? A. 5.5 cents per mile B. 58.5 cents per mile C. 62.5 cents per mile D. 65.5 cents per mile correct answer D What is the maximum amount of employer provided group term life insurance that can be excluded from an employee's income? A. One times their annual salary B. $2, C. $50, D. $100,000 correct answer C Which of the following is a "de minimis" fringe and is excluded from taxable earnings? A. $25 gift certificate for Rainbow Foods
D. No Limit correct answer B An employer with 120 participants offering a cafeteria plan must annually file what form? A. Suspended in 2002 no filing needed B. Form 5500 C/R C. Form 5500 D. Form 5550 C/R correct answer A Which of the following can not be part of a cafeteria plan? A. Group-term life insurance B. Qualified adoption assistance C. Cash D. Medical Savings Accounts correct answer D Under a cafeteria plan, pretax contribution to a 401 (k) are subject to what federal taxes? A. FICA, FUTA and FIT B. FICA and FUTA C. FICA D. None correct answer B CODA stand for what? A. Cash or Deferred Account B. Cost of Dependent Adoption C. Cash or Deferred Arrangement D. Cafeteria or Deferred Account correct answer C Who is at risk of forfeiture in a cafeteria plan health care FSA?
A. No one is at risk B. Employee only C. Employer only D. Both employee and employer correct answer D What does FSA stand for? A. Federal Savings Accounts B. Flexible Spending Arrangement C. Fair Standards Act of 1985 D. Federal Service Agency correct answer B Under a 125 plan pretax deductions are subject to what federal taxes? A. FICA, FUTA and FIT B. FICA and FUTA C. FICA D. None correct answer D State and local government employees would participate in which of the following deferred plans? A. 401 (k) B. 403 (b) C. 408 D. 457 correct answer D Public schools employees would participate in which of the following deferred plans? A. 401 (k) B. 403 (b)
Which of the following may not be regulated by state law? A. How often employees must be paid B. What employers must do with unclaimed paychecks C. How soon employees must be paid after their employment is terminated D. What minimum wage an employee must receive correct answer D Which of the following is not a advantage of the direct deposit system to the employer? A. Direct deposit cannot be made mandatory in most states B. Prevents lost and stolen checks C. employees do not have to take time out of their work day to cash or deposit their paycheck D. Better control of check stock correct answer A Which of the following is not a disadvantage of the direct deposit system to the employer? A. Direct deposit is not a paperless system B. Cannot dictate the bank that the employee uses C. Do not have to file/store cashed checks and related documents D. Loss of interest on payroll funds before paychecks clear correct answer C What are escheat laws? A. Federal laws governing direct deposit B. Federal laws governing unclaimed wages as abandoned property C. State laws governing direct deposit D. State laws governing unclaimed wages as abandoned property correct answer D Request for Taxpayer Identification Number and Certification is submitted on which form? A. Form SS-
B. Form SS- C. Form W- D. Form W-9 correct answer D What is the 2023 social security wage base? A. $142, B. $147, C. $160, D. No maximum amount correct answer C Verifying Social Security Numbers The SSA has three verification methods available to employers Which of the following is not one of them? A. Fax B. Phone C. Paper list D. Magnetic tape correct answer A For employee's who do not have an SSN they can get one by submitting "Application for a Social Security Card" Which of the following is the correct form? A. Form SS- B. Form SS- C. Form SS- D. Form SSA-7004 correct answer B When supplemental wage payment is paid separately or clearly indicated when add to regular wages What is the flat withholding rate for 2023? A. 22% B. 27%
A new hire does not submit payroll a W-4 by their first payday, they are married and have three children What withholding status do you use when calculating his withholding? A. Married with 3 allowances B. Married with 0 allowances C. Single with 4 allowances D. Single with 0 allowances correct answer D Generally an employer must file Form 940 by what date, of the year after the FUTA liability was incurred? A. January 31 B. February 28 C. April 1 D. April 30 correct answer A What is the FUTA taxable wage base for 2023? It is also the SUI minimum taxable wage base A. $ B. $ C. $ D. $9000 correct answer A What is the effective FUTA tax rate for 2023? A. .6% B. .8% C. 5.4% D. 6.0% correct answer A For depositing and paying FUTA tax If due date falls on a weekend or federal/state holiday when is the payment due?
A. Add to next deposit B. At the earliest time possible C. One business day earlier D. Next business day correct answer D How many weeks can a terminated employee collect unemployment without filing an extension? A. 6 Months B. 26 weeks C. 39 weeks D. 52 weeks correct answer B Which of the following is not one of methods used to determine an employer's unemployment insurance experience rating? A. Benefit ratio B. Benefit-wage ratio C. Payroll ratio D. Reserve ratio correct answer C Which of the following is not one of the types of employment that are exempt from FUTA? A. Life insurance agents who receive only commissions B. Tipped employees C. Work performed by statutory nonemployees D. Work on a foreign ship outside the U.S. correct answer B What is the credit percentage if an employer receives a full credit on FUTA for 2023? A. .6% B. .8%
