Question 1

What is the difference between a defined benefit and a defined contribution retirement plan?

Accepted Answer

A)  Defined contribution plans allow employees to contribute a set amount toward their retirement plan while employed. 
B)  Defined contribution plans allow employees to determine a specific amount of money they wish to receive upon retirement. 
C)  Defined benefit plans limit employee contributions while employed. 
D)  Defined benefit plans allow employees to set aside money on a tax-exempt basis. 
A)  Defined contribution plans allow employees to contribute a set amount toward their retirement plan while employed. 
B)  Defined contribution plans allow employees to determine a specific amount of money they wish to receive upon retirement. 
C)  Defined benefit plans limit employee contributions while employed. 
D)  Defined benefit plans allow employees to set aside money on a tax-exempt basis.

Question 2

Under the lease-value rule, how is the taxable income for the employee determined? (Select all that apply.)

Accepted Answer

A)  Use the annual lease value amount for the vehicle from Publication 15b. 
B)  Multiply the lease amount by the percent of business usage of the vehicle. 
C)  Subtract the dollar amount of the fuel used. 
D)  Multiple the lease amount by the percent of personal usage of the vehicle. 
A)  Use the annual lease value amount for the vehicle from Publication 15b. 
B)  Multiply the lease amount by the percent of business usage of the vehicle. 
C)  Subtract the dollar amount of the fuel used. 
D)  Multiple the lease amount by the percent of personal usage of the vehicle.

Question 3

According to the Consumer Credit Protection Act, what is the maximum percentage of an employee's disposable earnings that may be withheld as part of a consumer credit garnishment?

Accepted Answer

A)  25% 
B)  35% 
C)  50% 
D)  40% 
A)  25% 
B)  35% 
C)  50% 
D)  40%

Question 4

Under what condition is the fringe benefit of a gym membership taxable?

Accepted Answer

A)  When the employer has on-site facilities that are restricted to employee use. 
B)  When the employer offers membership to an off-site club at no additional cost to the employee. 
C)  When the employer has on-site facilities that are open to public use. 
D)  Gym memberships are always taxable. 
A)  When the employer has on-site facilities that are restricted to employee use. 
B)  When the employer offers membership to an off-site club at no additional cost to the employee. 
C)  When the employer has on-site facilities that are open to public use. 
D)  Gym memberships are always taxable.

Question 5

Frances McNale is an employee who drives a 2017 Ford C-Max with a fair-market value of $29,500. The lease value is $7,750, according to Publication 15-b. If the car was available for 150 days during the year, what is the prorated annual lease percentage, using the lease-value rule? (Do not round intermediate calculations, only round final answer to two decimal points.)

Accepted Answer

A)  35.63% 
B)  39.82% 
C)  41.10% 
D)  42.39% 
A)  35.63% 
B)  39.82% 
C)  41.10% 
D)  42.39%

Question 6

Luis Billiot is an employee of Plato Designs and drives a 2017 Toyota Camry as a company car. The fair-market value of the car is $25,499 and the lease value is $6,850, according to Publication 15-b. The car has been available for 300 days during the year and Luis has driven 5,500 of 28,350 miles for personal use. He pays for his own fuel. What is the amount of the company-car fringe benefit that will appear on Luis's W-2, using the lease-value rule? (Do not round intermediate calculations, only round final answer to two decimal points.)

Accepted Answer

A)  $1,252.48 
B)  $1,092.27 
C)  $875.14 
D)  $546.13 
A)  $1,252.48 
B)  $1,092.27 
C)  $875.14 
D)  $546.13

Question 7

Lakiesha is an employee who drives a 2017 Buick Verano as a company car. The fair-market value of the car is $28,545. She has been given the choice to have her fringe benefit reported on her W-2 either using the lease-value rule or the cents-per mile rule. According to Publication 15-b, the lease value is $7,750. She has driven 4,500 miles for personal use and 31,250 miles in total during the year. The car has been available for use on 200 days during the year. Lakiesha's employer pays for all fuel. What method and valuation will yield the lowest fringe-benefit amount for Lakiesha? (Do not round intermediate calculations, only round final answer to two decimal points.)

Accepted Answer

A)  Lease-value, $859.01 
B)  Cents-per-mile, $859.01 
C)  Lease value, $2,407.50 
D)  Cents-per-mile, $2,407.50 
A)  Lease-value, $859.01 
B)  Cents-per-mile, $859.01 
C)  Lease value, $2,407.50 
D)  Cents-per-mile, $2,407.50

Question 8

Tanesha works part-time for a governmental agency and is given a car for work-related and commute purposes. During the last calendar year, she worked 150 days and had a commute of 35 miles each direction. What is the amount of the company-car fringe benefit that will appear on her W-2? (Do not round intermediate calculations, only round final answer to two decimal points.)

Accepted Answer

A)  $15,750.00 
B)  $3,937.50 
C)  $7,875.00 
D)  $5,906.25 
A)  $15,750.00 
B)  $3,937.50 
C)  $7,875.00 
D)  $5,906.25

Question 9

In which type of retirement plan does the company offer employees the ability to earn company stock for the duration of their employment?

Accepted Answer

A)  SEP 
B)  SIMPLE 
C)  ESOP 
D)  401(k) 
A)  SEP 
B)  SIMPLE 
C)  ESOP 
D)  401(k)

Question 10

All employee contributions to qualified Premium-Only Plans (POP) and Flexible Spending Arrangements (FSA) are deducted on a pre-tax basis.

Accepted Answer

A) True 
 B)False

Question 11

________ benefits are fringe benefits with minimal value.

Accepted Answer

A)  Minimal 
B)  De minimis 
C)  De normal 
D)  Mandatory 
A)  Minimal 
B)  De minimis 
C)  De normal 
D)  Mandatory

Question 12

Fringe benefits and employee satisfaction have no correlation.

Accepted Answer

A) True 
 B)False

Question 13

According to the Affordable Health Care Act, employers with ________ or more employees are required to file an informational return with the IRS and a detailed summary to the employees.

Accepted Answer

A)  10 
B)  50 
C)  100 
D)  150 
A)  10 
B)  50 
C)  100 
D)  150

Question 14

Which of the following is an example of a post-tax mandated deduction? (Select all that apply.)

Accepted Answer

A)  Charitable contributions 
B)  Garnishments 
C)  Credit card liens 
D)  Tax liens 
A)  Charitable contributions 
B)  Garnishments 
C)  Credit card liens 
D)  Tax liens

Question 15

What is a limit on garnishments for nontax liens?

Accepted Answer

A)  It may not exceed 15% of an employee's disposable income. 
B)  It may be up to 50% of an employee's disposable income. 
C)  An additional 5% may be added for any lien payments in arrears. 
D)  It may not exceed 30 times the federal minimum wage. 
A)  It may not exceed 15% of an employee's disposable income. 
B)  It may be up to 50% of an employee's disposable income. 
C)  An additional 5% may be added for any lien payments in arrears. 
D)  It may not exceed 30 times the federal minimum wage.

Question 16

The primary difference between pre-tax and post-tax deductions is:

Accepted Answer

A)  Post-tax deductions reduce tax obligations. 
B)  Pre-tax deductions include child support. 
C)  Pre-tax deductions reduce tax liability. 
D)  Post-tax deductions reduce gross pay. 
A)  Post-tax deductions reduce tax obligations. 
B)  Pre-tax deductions include child support. 
C)  Pre-tax deductions reduce tax liability. 
D)  Post-tax deductions reduce gross pay.

Question 17

Charitable contributions are an example of post-tax voluntary deductions.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following must accompany a Health Savings Account (HSA) to be considered part of a cafeteria plan?

Accepted Answer

A)  Long-term care insurance 
B)  High-deductible health plan 
C)  Low-deductible health plan 
D)  Flexible Savings Agreement 
A)  Long-term care insurance 
B)  High-deductible health plan 
C)  Low-deductible health plan 
D)  Flexible Savings Agreement

Question 19

Certain fringe benefits that are not part of a cafeteria plan may be reported on the employee's Form W-2 as income.

Accepted Answer

A) True 
 B)False

Question 20

Health Savings Accounts may be used as pre-tax deductions for which type of costs? (Select all that apply.)

Accepted Answer

A)  Child medical expenses 
B)  Gasoline expenses 
C)  Long-term medical care expenses 
D)  Prescription expenses 
A)  Child medical expenses 
B)  Gasoline expenses 
C)  Long-term medical care expenses 
D)  Prescription expenses

What is the difference between a defined benefit and a defined contribution retirement plan?

Under the lease-value rule, how is the taxable income for the employee determined? (Select all that apply.)

According to the Consumer Credit Protection Act, what is the maximum percentage of an employee's disposable earnings that may be withheld as part of a consumer credit garnishment?

Under what condition is the fringe benefit of a gym membership taxable?

In which type of retirement plan does the company offer employees the ability to earn company stock for the duration of their employment?

All employee contributions to qualified Premium-Only Plans (POP) and Flexible Spending Arrangements (FSA) are deducted on a pre-tax basis.

________ benefits are fringe benefits with minimal value.

Fringe benefits and employee satisfaction have no correlation.

According to the Affordable Health Care Act, employers with ________ or more employees are required to file an informational return with the IRS and a detailed summary to the employees.

Which of the following is an example of a post-tax mandated deduction? (Select all that apply.)

What is a limit on garnishments for nontax liens?

The primary difference between pre-tax and post-tax deductions is:

Charitable contributions are an example of post-tax voluntary deductions.

Which of the following must accompany a Health Savings Account (HSA) to be considered part of a cafeteria plan?

Certain fringe benefits that are not part of a cafeteria plan may be reported on the employee's Form W-2 as income.

Health Savings Accounts may be used as pre-tax deductions for which type of costs? (Select all that apply.)

Payroll Practices and System Fundamentals

Payroll System Procedures

Gross Pay Computation

Employee Net Pay and Pay Methods

Employer Payroll Taxes and Labor Planning

The Payroll Register, Employees Earnings Records, and Accounting System Entries

Filters

Exam 4: Fringe Benefits and Voluntary Deductions

What is the difference between a defined benefit and a defined contribution retirement plan?

Under the lease-value rule, how is the taxable income for the employee determined? (Select all that apply.)

According to the Consumer Credit Protection Act, what is the maximum percentage of an employee's disposable earnings that may be withheld as part of a consumer credit garnishment?

Under what condition is the fringe benefit of a gym membership taxable?

In which type of retirement plan does the company offer employees the ability to earn company stock for the duration of their employment?

All employee contributions to qualified Premium-Only Plans (POP) and Flexible Spending Arrangements (FSA) are deducted on a pre-tax basis.

________ benefits are fringe benefits with minimal value.

Fringe benefits and employee satisfaction have no correlation.

According to the Affordable Health Care Act, employers with ________ or more employees are required to file an informational return with the IRS and a detailed summary to the employees.

Which of the following is an example of a post-tax mandated deduction? (Select all that apply.)

What is a limit on garnishments for nontax liens?

The primary difference between pre-tax and post-tax deductions is:

Charitable contributions are an example of post-tax voluntary deductions.

Which of the following must accompany a Health Savings Account (HSA) to be considered part of a cafeteria plan?

Certain fringe benefits that are not part of a cafeteria plan may be reported on the employee's Form W-2 as income.

Health Savings Accounts may be used as pre-tax deductions for which type of costs? (Select all that apply.)

Payroll Practices and System Fundamentals

Payroll System Procedures

Gross Pay Computation

Employee Net Pay and Pay Methods

Employer Payroll Taxes and Labor Planning

The Payroll Register, Employees Earnings Records, and Accounting System Entries

Filters