CAT Payroll Processing & Administration 5

Question 1

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

Accepted Answer

24 pay periods per year on fixed calendar dates

Answer

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

Question 2

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

Accepted Answer

22%

Answer

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

Question 3

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

Accepted Answer

Debit Wages Payable, Credit Cash

Answer

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

Question 4

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

Accepted Answer

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

Answer

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.

Question 5

What is the purpose of Form 941?

Accepted Answer

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

Answer

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

(CAT) Certified Accounting Technician Practice Test

(CAT) Certified Accounting Technician Practice Test

CAT Payroll Processing & Administration 5