Practice Test Geeks(CAT) Certified Accounting Technician Practice Test
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Payroll Processing & Administration Flashcards

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  1. Which of the following is a characteristic of a semi-monthly payroll schedule?

    Answer: 24 pay periods per year on fixed calendar dates

    Semi-monthly payroll occurs twice per month (e.g., the 1st and 15th), resulting in exactly 24 pay periods per year.

  2. An employee receives a $5,000 bonus. What is the supplemental wage withholding flat rate employers may use for federal income tax?

    Answer: 22%

    The IRS optional flat withholding rate for supplemental wages such as bonuses is 22% (for amounts up to $1 million).

  3. Which journal entry records the payment of net wages to employees via direct deposit?

    Answer: Debit Wages Payable, Credit Cash

    When net wages are paid, the previously accrued liability (Wages Payable) is debited and Cash is credited to reflect the outflow.

  4. Which of the following workers would most likely be classified as an employee rather than an independent contractor under IRS common law rules?

    Answer: A call center agent who works set hours using company systems and receives company training

    The IRS considers behavioral control, financial control, and type of relationship; a call center agent directed by the company with set hours and company tools is typically an employee.

  5. What is the purpose of Form 941?

    Answer: Quarterly reporting of federal income tax, Social Security, and Medicare taxes withheld

    Form 941 (Employer's Quarterly Federal Tax Return) is filed quarterly to report federal income tax withheld and both employee and employer FICA taxes.

  6. A 401(k) employee contribution of $500 is deducted from gross wages. How does this affect FICA tax calculations?

    Answer: It has no effect on FICA taxes; full gross wages are subject to FICA

    Traditional 401(k) contributions reduce federal and state income taxes but do not reduce FICA (Social Security and Medicare) taxable wages.

  7. Under the Electronic Federal Tax Payment System (EFTPS), when must a semi-weekly depositor submit payroll taxes for wages paid on Wednesday?

    Answer: By the following Friday

    For semi-weekly depositors, taxes on wages paid Wednesday through Friday must be deposited by the following Friday.