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APA Fundamental Payroll Certification FPC-Remote Exam Practice Test
Question 1
The FIRST action an employer should take when a natural disaster occurs is:
Answer : B
Comprehensive and Detailed Explanation:
When a natural disaster occurs, the first priority of any employer should be to ensure the safety and well-being of employees.
Step 1: Confirm employee safety -- Employers should account for all employees and provide immediate assistance if needed.
Step 2: Assess business operations impact -- Once employees are safe, the employer can begin securing records and office space.
Option A is incorrect because accessing payroll records is important but secondary to employee safety.
Option C is incorrect because temporary housing is not the employer's primary responsibility.
Option D is incorrect because securing office space is a later step in disaster recovery.
FEMA -- Emergency Preparedness Guidelines for Businesses
Payroll.org -- Disaster Recovery for Payroll Operations
Question 2
Which of the following circumstances would cause a breach of confidentiality?
Answer : B
Comprehensive and Detailed Explanation:
Payroll confidentiality ensures employee information is only disclosed with proper authorization.
Option A (Payment history with written authorization) is NOT a breach because the employee provided consent.
Option C (General ledger costing shared with accounting) is NOT a breach since accounting requires financial data for compliance.
Option D (Payroll records to legal department) is NOT a breach as legal teams need data for investigations.
Option B (Providing benefit election information to a spouse) is a breach unless the employee has explicitly authorized their spouse to receive this information.
Payroll.org -- Payroll Data Privacy Guidelines
HIPAA & Confidentiality in Payroll Recordkeeping
Question 3
An employee has received $169,000.00 in YTD earnings. The employee receives a payment of $16,600.00. The employer Medicare tax, if any, is:
Answer : C
Comprehensive and Detailed Explanation:
Medicare tax is 1.45% on wages up to $200,000, and 2.35% (including the Additional Medicare Tax) on wages above $200,000.
YTD Wages before payment: $169,000.00
New total earnings after bonus: $169,000 + $16,600 = $185,600.00
Since total wages are still under $200,000, only the standard Medicare rate applies:
$16,600 1.45% = $240.70
Thus, the correct answer is C. $240.70.
IRS -- Medicare Tax Guide
Payroll.org -- Payroll Tax Calculation Rules
Question 4
Using the following information from a payroll register, calculate the tax deposit liability for the payroll.
Answer : A
Comprehensive and Detailed Explanation:
The tax deposit liability includes federal income tax withholding (FITW), Social Security tax, and Medicare tax.
Social Security Tax:
Employer & Employee each pay 6.2% on $40,000
$40,000 6.2% 2 = $4,960.00
Medicare Tax:
Employer & Employee each pay 1.45% on $35,000
$35,000 1.45% 2 = $1,015.00
Total Tax Deposit Liability:
$2,000 (FITW) + $4,960 (Social Security) + $1,015 (Medicare) = $7,975.00
Thus, the correct answer is A. $7,975.00.
IRS Publication 15 -- Employer's Tax Guide
Payroll.org -- Payroll Tax Calculation Best Practices
Question 5
Calculate the Social Security tax to be withheld from the employee's next pay based on the following information:
Answer : B
Comprehensive and Detailed Explanation:
Social Security tax is calculated as 6.2% of Social Security taxable wages.
Calculate biweekly gross pay:
Monthly salary = $3,100.00
Biweekly pay = ($3,100 12) 26 = $1,430.77
Subtract pre-tax deductions (Medical & 401k):
Taxable wages = $1,430.77 - ($85 + $43) = $1,302.77
Calculate Social Security tax (6.2%):
$1,302.77 6.2% = $80.77
Thus, the correct answer is B. $86.04.
IRS Publication 15 -- Employer's Tax Guide
Payroll.org -- Social Security Tax Withholding
Question 6
Examples of positive active listening through body language include all of the following actions EXCEPT:
Answer : B
Shrugging shoulders (B) is a sign of uncertainty or disinterest, making it negative body language.
Making eye contact (C), nodding (D), and avoiding slouching (A) are positive active listening cues.
Effective Communication in Payroll Training Guide (Payroll.org)
Question 7
All of the following objectives are included in the operations of a Payroll Department EXCEPT:
Answer : C
Comprehensive and Detailed Explanation:
The Payroll Department's key functions include:
Tax reporting (Option A) -- Payroll ensures accurate IRS and state tax reporting.
Cost savings (Option B) -- Payroll manages efficiency, compliance, and automation to reduce costs.
Reporting to management (Option D) -- Payroll provides financial reports and insights to company leadership.
However, giving tax advice (Option C) is NOT a function of payroll. Payroll professionals calculate and withhold taxes but do not provide tax planning advice to employees.
Payroll.org -- Payroll Department Responsibilities
IRS -- Employer's Responsibilities for Payroll Taxes
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