Question 1

What method(s)may be used to determine the fair market value of the personal use of a company car? (You may select more than one answer. )

Accepted Answer

A) Appraised value rule 
B) Replacement value rule 
C) Commuting rule 
D) Cents-per-mile rule 
A) Appraised value rule 
B) Replacement value rule 
C) Commuting rule 
D) Cents-per-mile rule

Question 2

Hattie Bowers is a government employee who is provided a car for commuting and other work-related purposes only.In the last calendar year,her commute is 8 miles each way and she worked 220 days.What is the amount of the company-car fringe benefit that will appear on her W-2? (Do not round intermediate calculations. )

Accepted Answer

A) $2,140.00 
B) $2,640.00 
C) $4,680.00 
D) $5,280.00 
A) $2,140.00 
B) $2,640.00 
C) $4,680.00 
D) $5,280.00

Question 3

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 4

Employers benefit by offering POPs because they reduce ________.

Accepted Answer

A) income tax liability 
B) cash paid to employees 
C) FICA tax liability 
D) employee turnover 
A) income tax liability 
B) cash paid to employees 
C) FICA tax liability 
D) employee turnover

Question 5

Which of the following are examples of defined contribution plans? (You may select more than one answer. )

Accepted Answer

A) SIMPLE 
B) 403(b) 
C) Pension 
D) IRA 
A) SIMPLE 
B) 403(b) 
C) Pension 
D) IRA

Question 6

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.The car was available for 150 days during the year,and she reported that 6,500 of the 27,850 miles were driven for personal purposes.The company pays for all fuel and is charged back to Frances at $0.055 per mile.What is the amount of the company-car fringe benefit that will appear on Frances's W-2,using the lease-value rule? (Do not round intermediate calculations,only round final answer to two decimal points. )

Accepted Answer

A) $1,100.84 
B) $1,020.44 
C) $743.34 
D) $964.24 
A) $1,100.84 
B) $1,020.44 
C) $743.34 
D) $964.24

Question 7

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 the 28,350 miles for personal use.He pays for his own fuel.What is the percentage of miles driven for personal use,using the lease-value rule? (Do not round intermediate calculations,only round final answer to two decimal points. )

Accepted Answer

A) 82.19% 
B) 14.50% 
C) 19.40% 
D) 17.64% 
A) 82.19% 
B) 14.50% 
C) 19.40% 
D) 17.64%

Question 8

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 9

According to Consumer Credit Protection Act,what is a limit on the amount of a garnishment for consumer credit?

Accepted Answer

A) It must be less than 50% of an employee's gross earnings. 
B) It may be 75% of the employee's disposable income. 
C) It must be a minimum of 10% of an employee's annual salary. 
D) It cannot exceed 25% of an employee's disposable income. 
A) It must be less than 50% of an employee's gross earnings. 
B) It may be 75% of the employee's disposable income. 
C) It must be a minimum of 10% of an employee's annual salary. 
D) It cannot exceed 25% of an employee's disposable income.

Question 10

Which of the following is true about excluded fringe benefits? (You may select more than one answer. )

Accepted Answer

A) Excluded fringe benefits are generally not reported on the employee's W-2. 
B) Excluded fringe benefits are not generally a taxable part of employee pay. 
C) They must be part of the employer's cafeteria plan. 
D) The cash value of excluded fringe benefits is always taxable. 
A) Excluded fringe benefits are generally not reported on the employee's W-2. 
B) Excluded fringe benefits are not generally a taxable part of employee pay. 
C) They must be part of the employer's cafeteria plan. 
D) The cash value of excluded fringe benefits is always taxable.

Question 11

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 12

Employer contributions to employee health insurance must be:

Accepted Answer

A) Added to Federal taxable wages. 
B) Reported in Social Security wages. 
C) Reported in State taxable wages. 
D) Reported in Box 12,Code DD. 
A) Added to Federal taxable wages. 
B) Reported in Social Security wages. 
C) Reported in State taxable wages. 
D) Reported in Box 12,Code DD.

Question 13

Health Savings Accounts may be used as pre-tax deductions for which type of costs? (You may select more than one answer. )

Accepted Answer

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

Question 14

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,$1,362.50 
B) Cents-per-mile,$1,362.50 
C) Lease-value,$600.19 
D) Cents-per-mile,$600.19 
A) Lease-value,$1,362.50 
B) Cents-per-mile,$1,362.50 
C) Lease-value,$600.19 
D) Cents-per-mile,$600.19

Question 15

What is true about long-term disability insurance?

Accepted Answer

A) It is always included in taxable income. 
B) It is subject to Social Security taxes. 
C) It is subject to Medicare taxes. 
D) It may be deducted on either a pre-or post-tax basis. 
A) It is always included in taxable income. 
B) It is subject to Social Security taxes. 
C) It is subject to Medicare taxes. 
D) It may be deducted on either a pre-or post-tax basis.

Question 16

What is the purpose of pre-tax deductions?

Accepted Answer

A) To reduce the amount of tax revenue available. 
B) To reduce the financial burden on families. 
C) To reduce the financial burden on employers. 
D) To support proactive health care. 
A) To reduce the amount of tax revenue available. 
B) To reduce the financial burden on families. 
C) To reduce the financial burden on employers. 
D) To support proactive health care.

Question 17

What is the primary difference between the lease-value rule and the commuter rule as they pertain to the valuation of a company car fringe benefit?

Accepted Answer

A) The lease-value rule must be used for IRS reporting. 
B) The commuter rule considers all mileage driven as personal. 
C) The lease-value rule is only for internal company use. 
D) The commuter rule forbids personal use of the company vehicle. 
A) The lease-value rule must be used for IRS reporting. 
B) The commuter rule considers all mileage driven as personal. 
C) The lease-value rule is only for internal company use. 
D) The commuter rule forbids personal use of the company vehicle.

Question 18

Under the unsafe conditions rule:

Accepted Answer

A) An employee may use a company vehicle for a one-way commute. 
B) Employees may only use company cars if their normal travel mode is unsafe. 
C) Employees may leave work at any time. 
D) Employees are charged $1.50 for the one-way commute. 
A) An employee may use a company vehicle for a one-way commute. 
B) Employees may only use company cars if their normal travel mode is unsafe. 
C) Employees may leave work at any time. 
D) Employees are charged $1.50 for the one-way commute.

Question 19

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

Accepted Answer

A) $1,660 
B) $1,930 
C) $2,370 
D) $2,650 
A) $1,660 
B) $1,930 
C) $2,370 
D) $2,650

Question 20

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

What method(s)may be used to determine the fair market value of the personal use of a company car? (You may select more than one answer. )

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

Employers benefit by offering POPs because they reduce ________.

Which of the following are examples of defined contribution plans? (You may select more than one answer. )

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

According to Consumer Credit Protection Act,what is a limit on the amount of a garnishment for consumer credit?

Which of the following is true about excluded fringe benefits? (You may select more than one answer. )

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

Employer contributions to employee health insurance must be:

Health Savings Accounts may be used as pre-tax deductions for which type of costs? (You may select more than one answer. )

What is true about long-term disability insurance?

What is the purpose of pre-tax deductions?

What is the primary difference between the lease-value rule and the commuter rule as they pertain to the valuation of a company car fringe benefit?

Under the unsafe conditions rule:

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

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

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Exam 4: Fringe Benefits and Voluntary Deductions

What method(s)may be used to determine the fair market value of the personal use of a company car? (You may select more than one answer. )

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

Employers benefit by offering POPs because they reduce ________.

Which of the following are examples of defined contribution plans? (You may select more than one answer. )

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

According to Consumer Credit Protection Act,what is a limit on the amount of a garnishment for consumer credit?

Which of the following is true about excluded fringe benefits? (You may select more than one answer. )

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

Employer contributions to employee health insurance must be:

Health Savings Accounts may be used as pre-tax deductions for which type of costs? (You may select more than one answer. )

What is true about long-term disability insurance?

What is the purpose of pre-tax deductions?

What is the primary difference between the lease-value rule and the commuter rule as they pertain to the valuation of a company car fringe benefit?

Under the unsafe conditions rule:

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

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