Exam questions with complete solutions

2023 CPP Certified Payroll Professional   Practice Exam questions with complete solutions From what taxes are cafeteria plan contributions generally exempt?

• SS, Medi, FIT, and FUTA
• FIT and SIT
• SS, Medi, FUTA, and SUI
• SS, Medi, FIT, and SIT correct answers A. Social Security,

Medicare, FIT, and FUTA Reference 4.5 Cafeteria Plans In which boxes on the W-2 would you report the adoption assistance?

• Boxes 3, 4, 5, 6
• Boxes 1, 2, 3, 4, 5, 6, 12 - Code T
• Boxes 3, 4, 5, 6, 12 - Code A
• Boxes 3, 4, 5, 6, 12- Code T correct answers D. Boxes 3, 4, 5, 6,

12- Code T Reference 3.3 - 7 Adoption Assistance Which account is generally listed first on a corporate balance sheet?

• Investments in subsidiary companies
• Land and improvements
• Prepaid expenses
• Buildings and other property correct answers C. Prepaid expenses

What is a key advantage of processing payroll with a service provider compared to an in-house payroll system? 1 / 4

• No initial investment, no maintenance
• Enhanced communications capability
• Cost-effective resource and data sharing
• Convenience correct answers A. No initial investment, no

maintenance Reference 12.3 - 1 Service Providers - Outsourcing the Payroll What kind of account is Accrued Salaries Payable?

• Asset
• Expense
• Liability
• Revenue correct answers C. Liability

Reference 11.1 - 1 Account Classifications An ER has received multiple attachments for an EE. The orders were

received in the following sequence: Federal tax levy, consumer

garnishment, and child support payment order. In which order are the attachments applied against the EE's wages?

• Federal levy, child support payment, consumer garnishment
• Child support payment, consumer garnishment, federal levy
• Child support payment, federal levy, consumer garnishment
• Federal levy, consumer garnishment, child support payment correct

answers A. Federal levy, child support payment, consumer garnishment Reference 9.1 - 4 Bankruptcy Order 2 / 4

Under the principle of double-entry bookkeeping, what can a credit to an account signify?

• An increase in an asset account
• A decrease in a capital account
• A decrease in a liability account
• An increase in a liability account correct answers D. An increase in

a liability account Reference 11.6 Balancing and Reconciling Payroll Accounts Bob passed away December 8, 2013. His annual salary was $80,000.00 and he had 80 hours of accrued vacation. His YTD earnings prior to his death were $74,000.00. His surviving spouse received the vacation payout on December 28, 2013. How did the payment to spouse impact Bob's 2013 W-2?

• Box 1 - $77,076.80; Box 3 - $77,076.80; Box 5 - $77,076.80
• Box 1 - $74,000.00; Box 3 - $77,076.80; Box 5 - $77,076.80
• Box 1 - $74,000.00; Box 3 - $74,000.00; Box 5 - $77,076.80
• Box 1 - $74,000.00; Box 3 - $74,000.00; Box 5 - $74,000.00

correct answers B. Box 1 - $74,000.00; Box 3 - $77,076.80; Box 5 -

$77,076.80

Reference 3.4 - 30 Wages Paid After Death When using vendor-supplied software to process payroll, what is considered a disadvantage?

• User group networking
• Ease of use
• Specific needs may not be met 3 / 4

• Initial installation costs correct answers C. Specific needs may not

be met Reference 12.3 - 2 In-House Payroll Systems Which W-2 Box 12 code is used for a 403(b) plan?

• F
• E
• D
• K correct answers B. E (E for Education)

Reference 4.6 - 3 Tax Sheltered Annuities What phase of in-house system design follows the Development Phase?

• Evaluation Phase
• Conceptual Definition Phase
• Analysis Phase
• User Testing Phase correct answers D. User Testing Phase

Reference 12.3 - 2 In - House Payroll Systems Which management theory reviews the differences between managers and leaders?

• Kotter
• Covey
• Hershey, Blanchard, Johnson
• Principle-Centered Leadership correct answers A. Kotter
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