Practice Free FPC-REMOTE Exam Online Questions
Question #41
All of the following employee information is required when reporting unclaimed wages EXCEPT:
- A . Last Known Address
- B . Employee’s Full Name
- C . Employee’s Date of Birth
- D . Payment Amount and Date
Correct Answer: C
C
Explanation:
Employers must report unclaimed wages to the state according to escheatment laws. Required information includes:
Last Known Address (A) C To help locate the employee.
Full Name (B) C To identify the rightful owner.
Payment Amount & Date (D) C To track the missing wages.
Option C (Date of Birth) is NOT required in most state reporting systems, as name and address are sufficient for identification.
Reference: State Escheatment Laws C Unclaimed Wages
Payroll.org C Handling and Reporting Unclaimed Wages
C
Explanation:
Employers must report unclaimed wages to the state according to escheatment laws. Required information includes:
Last Known Address (A) C To help locate the employee.
Full Name (B) C To identify the rightful owner.
Payment Amount & Date (D) C To track the missing wages.
Option C (Date of Birth) is NOT required in most state reporting systems, as name and address are sufficient for identification.
Reference: State Escheatment Laws C Unclaimed Wages
Payroll.org C Handling and Reporting Unclaimed Wages
Question #42
An employee has YTD wages in the amount of $250,000.00 and receives a $1,753.00 bonus payment. Using the optional flat rate method, calculate the federal income tax withholding from the bonus payment.
- A . $385.00
- B . $420.13
- C . $534.63
- D . $647.50
Correct Answer: A
A
Explanation:
Under IRS guidelines, supplemental wages such as bonuses are subject to a flat federal tax rate of 22% if paid separately.
Federal Tax Calculation:
$1,753.00 × 22% = $385.66
Rounded to the nearest cent, the closest answer is $385.00.
Thus, the correct answer is A. $385.00.
Reference: IRS Publication 15-T C Federal Income Tax Withholding Methods Payroll.org C Supplemental Wage Withholding Rules
A
Explanation:
Under IRS guidelines, supplemental wages such as bonuses are subject to a flat federal tax rate of 22% if paid separately.
Federal Tax Calculation:
$1,753.00 × 22% = $385.66
Rounded to the nearest cent, the closest answer is $385.00.
Thus, the correct answer is A. $385.00.
Reference: IRS Publication 15-T C Federal Income Tax Withholding Methods Payroll.org C Supplemental Wage Withholding Rules
Question #43
Which of the following considerations is NOT needed when implementing a shared services environment?
- A . System needs
- B . Processes affected
- C . Employee acceptance
- D . Cost of implementation
Correct Answer: C
C
Explanation:
System needs (A), processes affected (B), and cost of implementation (D) are critical factors in designing a shared services model.
Employee acceptance (C) is valuable but not a primary technical or financial consideration.
Reference: Payroll Process Improvement Guidelines (Payroll.org)
C
Explanation:
System needs (A), processes affected (B), and cost of implementation (D) are critical factors in designing a shared services model.
Employee acceptance (C) is valuable but not a primary technical or financial consideration.
Reference: Payroll Process Improvement Guidelines (Payroll.org)
Question #44
When an employer allocates tips, which of the following statements is TRUE?
- A . Allocated tips are subject to federal income tax withholding
- B . The employer is not liable for amounts incorrectly allocated
- C . Report the allocated amount on the employee’s Form W-2
- D . No allocation is made for any reported tips
Correct Answer: C
C
Explanation:
Employers must allocate tips if the total reported tips are less than 8% of gross receipts for establishments where tipping is customary.
Allocated tips are reported on Form W-2, Box 8 (Option C) but are NOT subject to withholding.
Option A is incorrect because allocated tips are not subject to automatic withholding unless voluntarily reported by the employee.
Option B is incorrect because employers are responsible for accurate tip reporting. Option D is incorrect because tip allocation rules require reporting when applicable.
Reference: IRS Publication 531 C Reporting Tip Income
Payroll.org C Employer Tip Allocation Rules
C
Explanation:
Employers must allocate tips if the total reported tips are less than 8% of gross receipts for establishments where tipping is customary.
Allocated tips are reported on Form W-2, Box 8 (Option C) but are NOT subject to withholding.
Option A is incorrect because allocated tips are not subject to automatic withholding unless voluntarily reported by the employee.
Option B is incorrect because employers are responsible for accurate tip reporting. Option D is incorrect because tip allocation rules require reporting when applicable.
Reference: IRS Publication 531 C Reporting Tip Income
Payroll.org C Employer Tip Allocation Rules
Question #45
Which of the following expenses is a non-operating expense?
- A . Insurance
- B . Interest paid on income taxes
- C . Legal fees
- D . Utilities
Correct Answer: B
B
Explanation:
Non-operating expenses are costs not directly related to the core operations of a business.
Option A (Insurance) is an operating expense because it is necessary to protect business assets.
Option C (Legal fees) is an operating expense if related to business operations.
Option D (Utilities) is an operating expense because they are required to keep business operations running.
Option B (Interest paid on income taxes) is a non-operating expense because it is not part of daily business operations but rather a financial or tax-related cost.
Reference: GAAP Accounting Principles C Classification of Expenses
Payroll.org C Payroll-Related Business Expenses
B
Explanation:
Non-operating expenses are costs not directly related to the core operations of a business.
Option A (Insurance) is an operating expense because it is necessary to protect business assets.
Option C (Legal fees) is an operating expense if related to business operations.
Option D (Utilities) is an operating expense because they are required to keep business operations running.
Option B (Interest paid on income taxes) is a non-operating expense because it is not part of daily business operations but rather a financial or tax-related cost.
Reference: GAAP Accounting Principles C Classification of Expenses
Payroll.org C Payroll-Related Business Expenses
Question #46
Which of the following wage attachments has the highest priority for withholding?
- A . Bankruptcy
- B . Child Support
- C . State Tax Levy
- D . Wage Assignment
Correct Answer: A
A
Explanation:
The priority order for wage attachments is as follows:
Bankruptcy orders (Option A) C Court-ordered payments under the U.S. Bankruptcy Code take top priority over all other wage deductions.
Child support (Option B) C The second-highest priority under federal law, governed by the Consumer Credit Protection Act (CCPA).
State tax levies (Option C) C Third in priority, varies by state.
Wage assignments (Option D) C Lowest priority, usually voluntary agreements by employees.
Reference: Consumer Credit Protection Act (CCPA) C Wage Garnishment Priorities Payroll.org C Wage Garnishment Guidelines
A
Explanation:
The priority order for wage attachments is as follows:
Bankruptcy orders (Option A) C Court-ordered payments under the U.S. Bankruptcy Code take top priority over all other wage deductions.
Child support (Option B) C The second-highest priority under federal law, governed by the Consumer Credit Protection Act (CCPA).
State tax levies (Option C) C Third in priority, varies by state.
Wage assignments (Option D) C Lowest priority, usually voluntary agreements by employees.
Reference: Consumer Credit Protection Act (CCPA) C Wage Garnishment Priorities Payroll.org C Wage Garnishment Guidelines
Question #47
Examples of active listening include all of the following actions EXCEPT:
- A . Affirming verbally
- B . Interjecting an opinion
- C . Paraphrasing the discussion
- D . Asking open-ended questions
Correct Answer: B
B
Explanation:
Active listening is an essential payroll communication skill that ensures employees receive accurate information.
Option A (Affirming verbally) → Shows understanding and engagement.
Option C (Paraphrasing the discussion) → Ensures clarity and accuracy.
Option D (Asking open-ended questions) → Encourages better dialogue.
Option B (Interjecting an opinion) is incorrect because it can disrupt communication and cause misunderstandings.
Reference: Payroll.org C Customer Service and Communication Best Practices HR Compliance Training C Effective Workplace Communication
B
Explanation:
Active listening is an essential payroll communication skill that ensures employees receive accurate information.
Option A (Affirming verbally) → Shows understanding and engagement.
Option C (Paraphrasing the discussion) → Ensures clarity and accuracy.
Option D (Asking open-ended questions) → Encourages better dialogue.
Option B (Interjecting an opinion) is incorrect because it can disrupt communication and cause misunderstandings.
Reference: Payroll.org C Customer Service and Communication Best Practices HR Compliance Training C Effective Workplace Communication
Question #48
Documentation on legislative changes to Forms W-2 and W-3 is initiated by which of the following organizations?
- A . IRS
- B . OCSS
- C . SSA
- D . USCIS
Correct Answer: A
A
Explanation:
The Internal Revenue Service (IRS) is responsible for issuing updates related to Forms W-2 and W-3 under federal tax laws.
SSA (Social Security Administration) processes W-2s but does not initiate changes.
OCSS (Office of Child Support Services) and USCIS (U.S. Citizenship and Immigration Services) are not involved in payroll tax forms.
Reference: IRS Publication 15 (Employer’s Tax Guide)
IRS Form W-2 & W-3 Guidelines
A
Explanation:
The Internal Revenue Service (IRS) is responsible for issuing updates related to Forms W-2 and W-3 under federal tax laws.
SSA (Social Security Administration) processes W-2s but does not initiate changes.
OCSS (Office of Child Support Services) and USCIS (U.S. Citizenship and Immigration Services) are not involved in payroll tax forms.
Reference: IRS Publication 15 (Employer’s Tax Guide)
IRS Form W-2 & W-3 Guidelines
Question #49
An employee’s written notice of intent to take leave under the FMLA MUST be retained by the employer for a MINIMUM of:
- A . 2 years
- B . 3 years
- C . 4 years
- D . 5 years
Correct Answer: B
B
Explanation:
The Family and Medical Leave Act (FMLA) requires employers to retain all leave-related records for at least 3 years.
This includes:
Employee requests for leave
Employer’s written responses
Dates and duration of leave taken
Premium payments for benefits during leave
Option A (2 years) is incorrect because the minimum requirement is 3 years.
Option C (4 years) and Option D (5 years) are incorrect because the law specifies a 3-year retention period.
Reference: U.S. Department of Labor C FMLA Recordkeeping Requirements Payroll.org C Payroll Compliance for Employee Leave Records
B
Explanation:
The Family and Medical Leave Act (FMLA) requires employers to retain all leave-related records for at least 3 years.
This includes:
Employee requests for leave
Employer’s written responses
Dates and duration of leave taken
Premium payments for benefits during leave
Option A (2 years) is incorrect because the minimum requirement is 3 years.
Option C (4 years) and Option D (5 years) are incorrect because the law specifies a 3-year retention period.
Reference: U.S. Department of Labor C FMLA Recordkeeping Requirements Payroll.org C Payroll Compliance for Employee Leave Records
Question #50
The withholding of federal income tax is regulated by the:
- A . ACA
- B . IRC
- C . FICA
- D . FUTA
Correct Answer: B
B
Explanation:
The Internal Revenue Code (IRC) regulates the withholding of federal income tax (FIT).
FICA (C) governs Social Security & Medicare taxes.
FUTA (D) applies to unemployment tax but does not regulate withholding.
Reference: Internal Revenue Code (IRC) Section 3402
IRS Publication 15 (Employer’s Tax Guide)
B
Explanation:
The Internal Revenue Code (IRC) regulates the withholding of federal income tax (FIT).
FICA (C) governs Social Security & Medicare taxes.
FUTA (D) applies to unemployment tax but does not regulate withholding.
Reference: Internal Revenue Code (IRC) Section 3402
IRS Publication 15 (Employer’s Tax Guide)