Practice Test Geeks(APA) American Payroll Association Certification Practice Test
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Payroll Fundamentals Flashcards

7 cards from real APA 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 Fundamentals flashcards as text

  1. Which of the following fringe benefits is taxable and must be included in an employee's W-2 wages?

    Answer: Personal use of a company car

    The fair market value of personal use of a company vehicle is a taxable fringe benefit that must be included in the employee's W-2 wages.

  2. What is the IRS standard mileage rate primarily used for in payroll and expense reimbursement contexts?

    Answer: Reimbursing employees for business miles driven in personal vehicles tax-free

    Reimbursements at or below the IRS standard mileage rate for business miles driven in personal vehicles are excluded from income and FICA taxes.

  3. Under the FLSA regular rate of pay calculation, which of the following must be included?

    Answer: Non-discretionary production bonuses

    Non-discretionary bonuses (promised or based on production/performance targets) must be included in the FLSA regular rate for overtime calculation purposes.

  4. What is the purpose of a payroll reconciliation at year-end?

    Answer: To ensure total wages reported on W-2s agree with Form 941 quarterly totals and payroll records

    Year-end reconciliation verifies that W-2 totals, quarterly 941 filings, and general ledger payroll accounts all agree before filing.

  5. An employee submits a new W-4 claiming exempt from withholding. When does the exemption expire?

    Answer: February 15 of the following year

    A W-4 claiming exempt status expires on February 15 of the year following submission; the employee must file a new exempt W-4 by that date to continue exempt status.

  6. Which of the following correctly describes a 'constructive receipt' of wages?

    Answer: Wages credited to an employee's account or made available without substantial restrictions, even if not physically received

    Constructive receipt means income is taxable when it is made available to the employee without restriction, even if not yet physically collected.

  7. What is the penalty for failing to deposit payroll taxes on time under the IRS Failure to Deposit (FTD) rules for a deposit 6-15 days late?

    Answer: 5%

    The IRS FTD penalty is 5% of the undeposited amount for deposits made 6 to 15 days late.