- (Topic 2)
The reconciliation of an employee federal income tax withholding account occurs when which type of account is balanced?
Correct Answer:
D
✑ Payroll taxes withheld from employees are consideredliabilitiesuntil they are remitted to the IRS or state agencies.
✑ Liability accounts track amounts owed, includingfederal income tax, Social Security, and Medicare withholdings.
✑ Expense accounts (C)track company payroll expenses but are not used for withholding reconciliations.
References:
✑ IRS Payroll Accounting Guidelines
✑ Payroll Tax Reconciliation Guide (Payroll.org)
- (Topic 2)
A terminated employee submits a written request on August 1 for the current year Form W-2. By what date MUST the employer furnish the Form W-2?
Correct Answer:
A
✑ If a terminated employee requests a Form W-2 in writing, the employer must provide it within 30 daysor by January 31, whichever comes first.
✑ Since the request was made on August 1, the deadline is August 31.
References:
✑ IRS Form W-2 Guidelines
- (Topic 2)
The FLSA is enforced by which of the following entities?
Correct Answer:
A
✑ TheFair Labor Standards Act (FLSA)isenforced by the Department of Labor (DOL)through itsWage and Hour Division (WHD).
✑ ICE (Immigration and Customs Enforcement)handles immigration-related work
issues, not wage enforcement.
✑ IRS (Internal Revenue Service)enforces tax laws, not labor standards.
✑ SSA (Social Security Administration)manages Social Security benefits, not wage laws.
References:
✑ FLSA Compliance and Enforcement (DOL)
✑ Payroll Compliance Guidelines (Payroll.org)
- (Topic 2)
Employees may report tips to the employer using:
Correct Answer:
C
✑ Employees report tips using IRS Form 4070to their employer.
✑ Form 940reportsFUTA taxes, not tips.
✑ Form 941reportsquarterly payroll taxes, not tips.
✑ Form 8027is usedby large employers to report tip allocation, NOT individual reporting.
References:
✑ IRS Publication 531 (Reporting Tip Income)
- (Topic 1)
Specifying a defined response time for an employee's payroll-related question is a component of a Payroll Department??s:
Correct Answer:
B
Comprehensive and Detailed Explanation:AService Level Agreement (SLA) (Option B)outlines theexpected response times and resolution timesfor payroll inquiries. This ensures that payroll staff provide timely assistance to employees.
✑ Option A (General Service Contract)applies toexternal service providers, not
internal payroll departments.
✑ Option C (Standards of Excellence)refers tobroad performance benchmarks, but it does not include specific response times.
✑ Option D (Time Management)relates topersonal efficiency, not defined service expectations.
Reference:
Payroll.org – Payroll Service Level Agreements Best Practices HR Compliance Guide – Payroll Inquiry Handling
