Fundamental Payroll Certification Fundamental Payroll Year-End Processing and Reporting 2

Question 1

What is the primary purpose of year-end payroll reconciliation?

Accepted Answer

To verify that payroll register totals match tax return and W-2 amounts

Answer

To calculate total overtime hours worked during the year

Answer

To recalculate employee vacation and PTO accruals

Answer

To update employee direct deposit accounts for the new year

Question 2

Which form is used to correct errors on a previously issued and filed Form W-2?

Accepted Answer

Form W-2c

Answer

Form W-2R

Answer

Form 941-X

Answer

Form 1099-C

Question 3

What does Box 1 on Form W-2 represent?

Accepted Answer

Wages, tips, and other compensation subject to federal income tax withholding

Answer

Social Security wages before pre-tax deductions

Answer

Medicare wages and tips including all pre-tax benefits

Answer

State wages and tips as reported to state agencies

Question 4

What is 'imputed income' in the context of year-end payroll processing?

Accepted Answer

The taxable fair market value of non-cash fringe benefits added to an employee's gross wages

Answer

Income earned by an employee from a second employer during the year

Answer

Wages deferred through pre-tax benefit contributions

Answer

Overtime pay calculated and paid during the year-end bonus review

Question 5

During year-end reconciliation, which two data sources are most commonly compared to verify payroll accuracy?

Accepted Answer

Quarterly Form 941 totals versus annual payroll register totals

Answer

Employee handbook policies versus HR department records

Answer

State W-2 filings versus federal W-2 filings

Answer

Employee time sheets versus direct deposit transaction records

Question 6

How are taxable fringe benefits generally reported on Form W-2?

Accepted Answer

Taxable fringe benefits are included in Box 1 wages and also appear in Box 12 when a specific code applies

Answer

They are always excluded from all W-2 boxes as non-taxable

Answer

Only non-taxable fringe benefits are included in Box 1 wages

Answer

All fringe benefits regardless of taxability are reported exclusively in Box 14

Question 7

What does a year-end payroll checklist primarily help payroll professionals ensure?

Accepted Answer

All payroll year-end tasks are completed accurately and by required deadlines

Answer

Employee performance reviews are completed and documented before year-end

Answer

PTO and vacation balances are properly carried over into the new calendar year

Answer

Annual bonus amounts are correctly calculated and approved for each employee