Question 1

According to Bureau of Labor Statistics, what percentage additional compensation is offered in fringe benefits?

Accepted Answer

A)  10-18% 
B)  15-23% 
C)  21-29% 
D)  25-33% 
A)  10-18% 
B)  15-23% 
C)  21-29% 
D)  25-33%

Question 2

Ross is a full-time employee in Provo, Utah, who earns $42,000 annually, paid semimonthly. His federal income tax is $155.00. What is the maximum amount that may be withheld from his pay for a child-support garnishment, assuming he is not in arrears? (Do not round intermediate calculations, only round final answer to two decimal points. Utah has a 5% flat tax.)

Accepted Answer

A)  $365.28 
B)  $686.81 
C)  $584.45 
D)  $876.68 
A)  $365.28 
B)  $686.81 
C)  $584.45 
D)  $876.68

Question 3

What differentiates Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)?

Accepted Answer

A)  Amounts contributed to FSAs may not be rolled over from one year to the next. 
B)  HSAs expire on an annual basis but FSAs continue perpetually. 
C)  FSAs expire annually but HSAs may be reserved for use late in life. 
D)  Only HSAs may be deducted from employee on a pre-tax basis. 
A)  Amounts contributed to FSAs may not be rolled over from one year to the next. 
B)  HSAs expire on an annual basis but FSAs continue perpetually. 
C)  FSAs expire annually but HSAs may be reserved for use late in life. 
D)  Only HSAs may be deducted from employee on a pre-tax basis.

Question 4

If a fringe benefit involves a deduction from employee pay, which of the following is true?

Accepted Answer

A)  Employers may only offer the benefit to certain classes of employees. 
B)  The employee must enroll in direct deposit for their pay. 
C)  The fringe benefit must be subject to income tax. 
D)  The amount of the deduction must be listed on the employee's pay advice. 
A)  Employers may only offer the benefit to certain classes of employees. 
B)  The employee must enroll in direct deposit for their pay. 
C)  The fringe benefit must be subject to income tax. 
D)  The amount of the deduction must be listed on the employee's pay advice.

Question 5

By what date must the value of all noncash benefits be determined for the preceding year?

Accepted Answer

A)  December 31 
B)  January 31 
C)  February 28 
D)  March 31 
A)  December 31 
B)  January 31 
C)  February 28 
D)  March 31

Question 6

Under the special accounting rule, benefits provided in the last quarter of the year may be reported during the following year.

Accepted Answer

A) True 
 B)False

Question 7

Over ________ of U.S. employees report that fringe benefits affect their choice of employers.

Accepted Answer

A)  10% 
B)  25% 
C)  40% 
D)  50% 
A)  10% 
B)  25% 
C)  40% 
D)  50%

Question 8

Premiums for insurance purchased through qualified cafeteria plans may be deducted from an employee's pay on a pre-tax basis.

Accepted Answer

A) True 
 B)False

Question 9

Ronald Ferrer is an employee who drives a 2017 Chevrolet Malibu as a company car. The fair-market value of the car is $23,175. He has been given the choice to have his fringe benefit reported on his W-2 either using the lease-value rule or the cents-per mile rule. According to Publication 15-b, the lease value is $6,350. He has driven 2,500 miles for personal use and 23,500 miles in total during the year. The car has been available for use on 250 days during the year. Ronald's employer pays for all fuel. What method and valuation will yield the lowest fringe-benefit amount for Ronald? (Do not round intermediate calculations, only round final answer to two decimal points.)

Accepted Answer

A)  Lease-value, $1,337.50 
B)  Cents-per-mile, $1,337.50 
C)  Lease-value, $600.19 
D)  Cents-per-mile, $600.19 
A)  Lease-value, $1,337.50 
B)  Cents-per-mile, $1,337.50 
C)  Lease-value, $600.19 
D)  Cents-per-mile, $600.19

Question 10

Post-Tax Deductions are amounts ________.

Accepted Answer

A)  that are voluntarily chosen by the employee 
B)  that the employer chooses to withhold after assessing the employee's tax liability 
C)  includes both mandatory and voluntary deductions 
D)  are only mandatory deductions like garnishments and union dues 
A)  that are voluntarily chosen by the employee 
B)  that the employer chooses to withhold after assessing the employee's tax liability 
C)  includes both mandatory and voluntary deductions 
D)  are only mandatory deductions like garnishments and union dues

Question 11

Which of the following are post-tax deductions? (Select all that apply.)

Accepted Answer

A)  Employee contributions to gym memberships 
B)  Employee contributions to 401(k) plans 
C)  Employee contributions to charitable organizations 
D)  Employee contributions to union dues 
A)  Employee contributions to gym memberships 
B)  Employee contributions to 401(k) plans 
C)  Employee contributions to charitable organizations 
D)  Employee contributions to union dues

Question 12

Which of the following may be included as part of an employee's Section 125 "cafeteria" plan?

Accepted Answer

A)  Medical expenses 
B)  Tuition expenses 
C)  Meal expenses 
D)  Moving expenses 
A)  Medical expenses 
B)  Tuition expenses 
C)  Meal expenses 
D)  Moving expenses

Question 13

Michael McBride is an employee of Reach-it Pharmaceuticals. His company car is a 2017 Lexus GS 200t with a fair-market value of $50,000 and a lease value of $13,250, according to Publication 15-b. During the year, Michael drove 45,000 miles, of which 9,000 were for personal use. The car was available for use on 270 of the days during the year. All gasoline was provided by the employer and is charged back to Michael at $0.055 per mile. What is the amount of the company-car fringe benefit that will appear on Michael's W-2, using the lease-value rule? (Do not round intermediate calculations, only round final answer to two decimal points.)

Accepted Answer

A)  $2,742.77 
B)  $2,455.27 
C)  $2,156.87 
D)  $1,960.27 
A)  $2,742.77 
B)  $2,455.27 
C)  $2,156.87 
D)  $1,960.27

Question 14

Contributions to FSAs in excess of what annual amount are treated as taxable income?

Accepted Answer

A)  $1,600 
B)  $1,900 
C)  $2,300 
D)  $2,600 
A)  $1,600 
B)  $1,900 
C)  $2,300 
D)  $2,600

Question 15

What differentiates 401(k) and a 403(b) retirement plans?

Accepted Answer

A)  401(k) plans are limited to companies with more than 100 employees. 
B)  403(b) plans are subject to all payroll taxes. 
C)  401(k) plans may not be invested in stock-market funds. 
D)  403(b) plans are offered by non-profit employers. 
A)  401(k) plans are limited to companies with more than 100 employees. 
B)  403(b) plans are subject to all payroll taxes. 
C)  401(k) plans may not be invested in stock-market funds. 
D)  403(b) plans are offered by non-profit employers.

Question 16

What is the major limitation of a SIMPLE retirement plan?

Accepted Answer

A)  It is limited to firms with 100 or fewer employees. 
B)  Employee contributions to the plan are limited. 
C)  SIMPLE plans are subject to all payroll taxes. 
D)  SIMPLE plan funds must be invested in stock market securities. 
A)  It is limited to firms with 100 or fewer employees. 
B)  Employee contributions to the plan are limited. 
C)  SIMPLE plans are subject to all payroll taxes. 
D)  SIMPLE plan funds must be invested in stock market securities.

Question 17

Which of the following, according to the IRS, is used to determine if a health plan qualifies for pre-tax status? (Select all that apply.)

Accepted Answer

A)  An employer's self-insured plan 
B)  COBRA health coverage 
C)  Cancer and accident policies 
D)  Retiree health coverage 
A)  An employer's self-insured plan 
B)  COBRA health coverage 
C)  Cancer and accident policies 
D)  Retiree health coverage

Question 18

Retirement fund contributions are generally subject to ________ and ________ taxes.

Accepted Answer

A)  Federal withholding; State withholding 
B)  Federal withholding; Social Security 
C)  Social Security; Medicare 
D)  Federal withholding; Medicare 
A)  Federal withholding; State withholding 
B)  Federal withholding; Social Security 
C)  Social Security; Medicare 
D)  Federal withholding; Medicare

Question 19

The ________ determines when benefit amounts should be withheld from employee pay.

Accepted Answer

A)  employee 
B)  employer 
C)  IRS 
D)  State in which the business is conducted 
A)  employee 
B)  employer 
C)  IRS 
D)  State in which the business is conducted

Question 20

The purpose of fringe benefits is to ________.

Accepted Answer

A)  reduce taxable compensation 
B)  entice employee engagement 
C)  avoid cash outlays for employee benefits 
D)  defer tax obligations 
A)  reduce taxable compensation 
B)  entice employee engagement 
C)  avoid cash outlays for employee benefits 
D)  defer tax obligations

According to Bureau of Labor Statistics, what percentage additional compensation is offered in fringe benefits?

What differentiates Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)?

If a fringe benefit involves a deduction from employee pay, which of the following is true?

By what date must the value of all noncash benefits be determined for the preceding year?

Under the special accounting rule, benefits provided in the last quarter of the year may be reported during the following year.

Over ________ of U.S. employees report that fringe benefits affect their choice of employers.

Premiums for insurance purchased through qualified cafeteria plans may be deducted from an employee's pay on a pre-tax basis.

Post-Tax Deductions are amounts ________.

Which of the following are post-tax deductions? (Select all that apply.)

Which of the following may be included as part of an employee's Section 125 "cafeteria" plan?

Contributions to FSAs in excess of what annual amount are treated as taxable income?

What differentiates 401(k) and a 403(b) retirement plans?

What is the major limitation of a SIMPLE retirement plan?

Which of the following, according to the IRS, is used to determine if a health plan qualifies for pre-tax status? (Select all that apply.)

Retirement fund contributions are generally subject to and taxes.

The ________ determines when benefit amounts should be withheld from employee pay.

The purpose of fringe benefits is to ________.

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

According to Bureau of Labor Statistics, what percentage additional compensation is offered in fringe benefits?

What differentiates Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs)?

If a fringe benefit involves a deduction from employee pay, which of the following is true?

By what date must the value of all noncash benefits be determined for the preceding year?

Under the special accounting rule, benefits provided in the last quarter of the year may be reported during the following year.

Over ________ of U.S. employees report that fringe benefits affect their choice of employers.

Premiums for insurance purchased through qualified cafeteria plans may be deducted from an employee's pay on a pre-tax basis.

Post-Tax Deductions are amounts ________.

Which of the following are post-tax deductions? (Select all that apply.)

Which of the following may be included as part of an employee's Section 125 "cafeteria" plan?

Contributions to FSAs in excess of what annual amount are treated as taxable income?

What differentiates 401(k) and a 403(b) retirement plans?

What is the major limitation of a SIMPLE retirement plan?

Which of the following, according to the IRS, is used to determine if a health plan qualifies for pre-tax status? (Select all that apply.)

Retirement fund contributions are generally subject to ________ and ________ taxes.

The ________ determines when benefit amounts should be withheld from employee pay.

The purpose of fringe benefits is to ________.

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

Retirement fund contributions are generally subject to and taxes.