Practice Free FPC-REMOTE Exam Online Questions
Question #31
Which of the following statements is TRUE regarding the pre-notification process?
- A . Sent at least five days prior to payday
- B . Required prior to direct deposit beginning
- C . Verifies the employee’s name is on the bank account
- D . Involves sending a zero-dollar transaction through ACH
Correct Answer: D
D
Explanation:
A pre-notification (pre-note) process is used by payroll departments to verify banking details before initiating direct deposit payments.
A zero-dollar transaction is sent via ACH (Automated Clearing House) to ensure account validity.
This step prevents payment errors and fraudulent transactions.
Option A is incorrect because pre-notes are usually processed 3C6 days before payday, but not necessarily five days in all cases.
Option B is incorrect because not all employers require a pre-note before direct deposit begins. Option C is incorrect because ACH verification does not confirm the employee’s full legal name.
Reference: National Automated Clearing House Association (NACHA) C ACH Pre-Notification Guidelines Payroll.org C Direct Deposit Compliance Rules
D
Explanation:
A pre-notification (pre-note) process is used by payroll departments to verify banking details before initiating direct deposit payments.
A zero-dollar transaction is sent via ACH (Automated Clearing House) to ensure account validity.
This step prevents payment errors and fraudulent transactions.
Option A is incorrect because pre-notes are usually processed 3C6 days before payday, but not necessarily five days in all cases.
Option B is incorrect because not all employers require a pre-note before direct deposit begins. Option C is incorrect because ACH verification does not confirm the employee’s full legal name.
Reference: National Automated Clearing House Association (NACHA) C ACH Pre-Notification Guidelines Payroll.org C Direct Deposit Compliance Rules
Question #32
What is the purpose of Form I-9?
- A . To request an ITIN
- B . To determine how much FIT to withhold from a paycheck
- C . To summarize taxable wages earned during the calendar year
- D . To verify the identity and employment authorization of a worker
Correct Answer: D
D
Explanation:
Form I-9, Employment Eligibility Verification, is used by employers to:
Verify the identity of newly hired employees
Ensure employees are legally authorized to work in the U.S.
Prevent illegal employment practices
Option A (Request an ITIN) is incorrect because an ITIN (Individual Taxpayer Identification Number) is requested using Form W-7, not I-9.
Option B (Determine FIT withholding) is incorrect because Form W-4 is used for federal income tax withholding, not Form I-9.
Option C (Summarize taxable wages) is incorrect because Form W-2 summarizes taxable wages.
Reference: U.S. Citizenship and Immigration Services (USCIS) C Form I-9 Instructions Payroll.org C Employment Eligibility Verification Guide
D
Explanation:
Form I-9, Employment Eligibility Verification, is used by employers to:
Verify the identity of newly hired employees
Ensure employees are legally authorized to work in the U.S.
Prevent illegal employment practices
Option A (Request an ITIN) is incorrect because an ITIN (Individual Taxpayer Identification Number) is requested using Form W-7, not I-9.
Option B (Determine FIT withholding) is incorrect because Form W-4 is used for federal income tax withholding, not Form I-9.
Option C (Summarize taxable wages) is incorrect because Form W-2 summarizes taxable wages.
Reference: U.S. Citizenship and Immigration Services (USCIS) C Form I-9 Instructions Payroll.org C Employment Eligibility Verification Guide
Question #33
The FINAL phase of the accounting process involves the:
- A . Transactions
- B . Journal entries
- C . General ledger
- D . Financial statements
Correct Answer: D
D
Explanation:
The final phase of the accounting process is generating financial statements (D), which summarize all accounting activities.
Transactions (A), journal entries (B), and general ledger (C) occur earlier in the process.
Reference: Payroll Accounting Standards (Payroll.org)
D
Explanation:
The final phase of the accounting process is generating financial statements (D), which summarize all accounting activities.
Transactions (A), journal entries (B), and general ledger (C) occur earlier in the process.
Reference: Payroll Accounting Standards (Payroll.org)
Question #34
When an employee does not answer an unclaimed wage inquiry, the employer should:
- A . Refer to state laws for final resolution of the wages
- B . Maintain listings of the unclaimed wages indefinitely
- C . Reissue the payment and mail it to the last known address
- D . Convert the wages to reportable income and remove the liability balance
Correct Answer: A
A
Explanation:
Unclaimed wages must be handled according to state escheatment laws (A), which determine how long wages must be held before being turned over to the state.
Reference: State Unclaimed Property Laws
A
Explanation:
Unclaimed wages must be handled according to state escheatment laws (A), which determine how long wages must be held before being turned over to the state.
Reference: State Unclaimed Property Laws
Question #35
To stop payment on an employee’s check, the employer must work with the:
- A . IRS
- B . Payroll provider
- C . Employer’s bank
- D . Employee’s bank
Correct Answer: C
C
Explanation:
Only the employer’s bank (C) can place a stop payment request.
Payroll providers (B) may facilitate, but do not issue bank stops.
Reference: Payroll Banking & Direct Deposit Standards (Payroll.org)
C
Explanation:
Only the employer’s bank (C) can place a stop payment request.
Payroll providers (B) may facilitate, but do not issue bank stops.
Reference: Payroll Banking & Direct Deposit Standards (Payroll.org)
Question #35
To stop payment on an employee’s check, the employer must work with the:
- A . IRS
- B . Payroll provider
- C . Employer’s bank
- D . Employee’s bank
Correct Answer: C
C
Explanation:
Only the employer’s bank (C) can place a stop payment request.
Payroll providers (B) may facilitate, but do not issue bank stops.
Reference: Payroll Banking & Direct Deposit Standards (Payroll.org)
C
Explanation:
Only the employer’s bank (C) can place a stop payment request.
Payroll providers (B) may facilitate, but do not issue bank stops.
Reference: Payroll Banking & Direct Deposit Standards (Payroll.org)
Question #37
An independent contractor status is indicated if the worker:
- A . Receives a Form W-2.
- B . Completes a Form W-4.
- C . Is not required to complete Form I-9.
- D . Is not required to complete Form W-9.
Correct Answer: C
C
Explanation:
Independent contractors DO NOT complete Form I-9, as they are not employees under IRCA (Immigration Reform and Control Act).
Employees receive Form W-2 and complete Form W-4. Independent contractors complete Form W-9 for tax reporting.
Reference: IRS Independent Contractor Guidelines (Publication 1779)
C
Explanation:
Independent contractors DO NOT complete Form I-9, as they are not employees under IRCA (Immigration Reform and Control Act).
Employees receive Form W-2 and complete Form W-4. Independent contractors complete Form W-9 for tax reporting.
Reference: IRS Independent Contractor Guidelines (Publication 1779)
Question #38
Employers can take advantage of all of the following affordability safe harbors set forth in the ACA regulations EXCEPT:
- A . Rate of pay
- B . Section 530
- C . Form W-2 wages
- D . The federal poverty line
Correct Answer: B
B
Explanation:
ACA affordability safe harbors include (A), (C), and (D), but NOT Section 530 (B), which relates to independent contractor classification.
Reference: Affordable Care Act Compliance Guide
B
Explanation:
ACA affordability safe harbors include (A), (C), and (D), but NOT Section 530 (B), which relates to independent contractor classification.
Reference: Affordable Care Act Compliance Guide
Question #39
A company has engaged an individual to write a sales contract. The individual receives a flat amount for the task and has an assigned time frame for completion.
This individual is classified as a(n):
- A . Leased Employee
- B . Administrative Employee
- C . Independent Contractor
- D . Commissioned Salesperson
Correct Answer: C
C
Explanation:
An independent contractor is an individual who:
Works on a per-project basis
Is not under direct employer control
Provides services to multiple clients
Option A (Leased Employee) refers to employees hired through a staffing agency.
Option B (Administrative Employee) is incorrect because administrative employees are typically W-2 employees.
Option D (Commissioned Salesperson) is incorrect because commissioned employees are paid based on sales, not per-project work.
Reference: IRS C Independent Contractor vs. Employee Guidelines
Payroll.org C Worker Classification Compliance
C
Explanation:
An independent contractor is an individual who:
Works on a per-project basis
Is not under direct employer control
Provides services to multiple clients
Option A (Leased Employee) refers to employees hired through a staffing agency.
Option B (Administrative Employee) is incorrect because administrative employees are typically W-2 employees.
Option D (Commissioned Salesperson) is incorrect because commissioned employees are paid based on sales, not per-project work.
Reference: IRS C Independent Contractor vs. Employee Guidelines
Payroll.org C Worker Classification Compliance
Question #40
An employer who takes the tip credit has an employee who worked 25 hours and received $100.00 in tips. Calculate the employee’s gross pay.
- A . $81.25
- B . $153.25
- C . $181.25
- D . $281.25
Correct Answer: B
B
Explanation:
Under the FLSA tip credit rules, the employer may pay a reduced cash wage of $2.13 per hour, as long as tips bring the total wage to at least $7.25 per hour.
Cash Wage Calculation:
$2.13 × 25 hours = $53.25
Tips Received:
$100.00
Total Gross Pay:
$53.25 + $100.00 = $153.25
Thus, the correct answer is
B. $153.25.
Reference: FLSA C Tip Credit Rules and Minimum Wage Compliance
Payroll.org C Employer Guidelines for Tip Reporting
B
Explanation:
Under the FLSA tip credit rules, the employer may pay a reduced cash wage of $2.13 per hour, as long as tips bring the total wage to at least $7.25 per hour.
Cash Wage Calculation:
$2.13 × 25 hours = $53.25
Tips Received:
$100.00
Total Gross Pay:
$53.25 + $100.00 = $153.25
Thus, the correct answer is
B. $153.25.
Reference: FLSA C Tip Credit Rules and Minimum Wage Compliance
Payroll.org C Employer Guidelines for Tip Reporting