Practice Test Geeks(ABA) Accredited Business Accountant Practice Test
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Payroll Processing & Compliance Flashcards

7 cards from real ABA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Payroll Processing & Compliance flashcards as text

  1. Under the Consumer Credit Protection Act (CCPA), what is the maximum percentage of disposable earnings that can be garnished for a single creditor garnishment when no support order is involved?

    Answer: 25%

    The CCPA limits creditor garnishments to the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage.

  2. A company switches from a biweekly to a semimonthly payroll. Which of the following best describes the impact on annual payroll processing?

    Answer: Pay periods decrease from 26 to 24

    Biweekly payroll produces 26 pay periods per year, while semimonthly produces exactly 24, reducing processing runs by two.

  3. Which form must a new hire complete to verify employment eligibility under the Immigration Reform and Control Act?

    Answer: Form I-9

    Form I-9 (Employment Eligibility Verification) must be completed by both the employee and employer within three business days of the hire date.

  4. When must an employer file Form 941 for Q1 (January–March)?

    Answer: April 30

    Form 941 is due by the last day of the month following the end of the quarter; Q1 returns are due April 30.

  5. Which concept describes the practice of delaying the recognition of compensation to a future tax year, creating both ERISA and IRC Section 409A compliance obligations?

    Answer: Deferred compensation

    Nonqualified deferred compensation plans defer income recognition to a future date and must comply with IRC Section 409A to avoid penalties.

  6. Which IRS penalty applies when an employer fails to deposit payroll taxes on time, with a base rate of 2% for deposits 1–5 days late?

    Answer: Failure-to-deposit penalty

    The failure-to-deposit penalty under IRC Section 6656 starts at 2% for deposits 1–5 days late and increases to 15% for amounts still unpaid after 10 days of an IRS demand.

  7. An employee receives a $10,000 severance payment in addition to their final regular paycheck. Which federal supplemental withholding rate applies if the employer uses the flat-rate method?

    Answer: 22%

    The IRS optional flat withholding rate for supplemental wages (including severance) is 22% as of 2024.