- (Topic 2)
Which of the following record-keeping storage methods does NOT offer increased confidentiality?
Correct Answer:A
✑ Paper records (A) pose a higher security riskdue to physical access and loss potential.
✑ Cloud, micromedia, and media imaging offer encryption, access control, and audit trails. References:
✑ Payroll Record Security Best Practices (Payroll.org)
- (Topic 2)
What is the purpose of the ACA legislation?
Correct Answer:B
✑ The ACA (Affordable Care Act) was enacted to reform healthcare.
✑ It mandates employer-provided health insurance and individual coverage. References:
✑ Affordable Care Act (IRS)
- (Topic 1)
Which of the following account types has a normal debit balance?
Correct Answer:A
Comprehensive and Detailed Explanation:In accounting, anormal balancerefers to theside (debit or credit) that increases the account balance.
✑ Assets (Option A) normally have a debit balancebecause they representresources
owned by the company(cash, accounts receivable, equipment, etc.).
✑ Liabilities (Option C) and Revenue (Option D) normally have credit balances, meaning they increase with credits.
✑ Capital (Option B) also has a normal credit balance, as it representsowner??s
equity. Reference:
GAAP Accounting Principles – Normal Account Balances Payroll.org – Payroll Accounting Basics
- (Topic 1)
When an employee fails to cash a payroll check and the employer cannot locate the employee, the Payroll Department should:
Correct Answer:D
Comprehensive and Detailed Explanation:Unclaimed wages (also known asescheat wages) must be handled according tostate escheatment laws.Each statehas its own rules
about how long employers must hold unclaimed wages before remitting them to thestate??s unclaimed property division.
✑ Option Ais incorrect because voiding the check does not resolve the issue of
unclaimed wages, and FormW-2cis used forcorrecting tax information, not handling unclaimed wages.
✑ Option Bis incorrect because unclaimed wagescannotbe posted asforfeited
earningswithout proper reporting to the state.
✑ Option Cis incorrect becauseescheatment laws are governed at the state level, not federal.
Reference:
Payroll.org – Unclaimed Wages and Escheatment Guidelines State Escheatment Laws and Compliance Regulations
- (Topic 1)
The purpose of grossing-up an amount to an employee is to:
Correct Answer:C
Comprehensive and Detailed Explanation:Grossing upmeansincreasing the payment amountso that the employeereceives a specific net amountafter taxes are withheld. Employerspay the taxes on behalf of the employeein such cases.
This is commonly used for:
✑ Relocation reimbursements
✑ Bonus payments
✑ Tax equalization for expatriates
✑ Option Ais incorrect because grossing up is done to cover taxes, not to determine withholdings.
✑ Option Bis incorrect becausegrossed-up amounts are taxable, not tax-exempt.
✑ Option Dis incorrect becausegrossed-up payments are always taxable. Formula:
Reference:
IRS Publication 15 – Employer??s Tax Guide Payroll.org – Gross-Up Calculation Methods