FPC-REMOTE Fundamental Payroll Certification PDF Dumps

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Exam : FPC-REMOTE
Title :
https://www.passcert.com/FPC-REMOTE.html
Fundamental Payroll
Certification
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1.Which of the following documents listed on Form I-9 can be used to establish both an employee's
identity and employment eligibility?
A. Social Security Card
B. U.S. Passport
C. Voter’s Registration Card
D. Driver’s License
Answer: B
Explanation:
According to Form I-9, Employment Eligibility Verification, an unexpired U.S. passport is a List A
document that establishes both an employee’s identity and work authorization.
A Social Security card (Option A) is a List C document, which only proves employment authorization but
not identity.
A Voter’s Registration Card (Option C) is not an acceptable I-9 document for identity or work
authorization.
A Driver’s License (Option D) is a List B document, which only proves identity but not employment
eligibility.
Reference: U.S. Citizenship and Immigration Services (USCIS) – Form I-9 Instructions Payroll.org –
Employment Eligibility Verification Guidelines
2.When an employee fails to cash a payroll check and the employer cannot locate the employee, the
Payroll Department should:
A. Void the check and process a Form W-2c for the employee.
B. Make a journal entry to post to a cash account as forfeited earnings.
C. Use company policy and federal law to determine the process of submitting the unclaimed wages to
the IRS.
D. Use company policy and state law to determine the process of submitting the unclaimed wages to the
state agency.
Answer: D
Explanation:
Unclaimed wages (also known as escheat wages) must be handled according to state escheatment laws.
Each state has its own rules about how long employers must hold unclaimed wages before remitting them
to the state’s unclaimed property division.
Option A is incorrect because voiding the check does not resolve the issue of unclaimed wages, and Form
W-2c is used for correcting tax information, not handling unclaimed wages.
Option B is incorrect because unclaimed wages cannot be posted as forfeited earnings without proper
reporting to the state.
Option C is incorrect because escheatment laws are governed at the state level, not federal.
Reference: Payroll.org – Unclaimed Wages and Escheatment Guidelines State Escheatment Laws and
Compliance Regulations
3.Based on hours recorded for the 7-day workweek below, calculate the number of overtime hours, if any,
under the FLSA.
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A. 0
B. 3
C. 5
D. 13
Answer: B
Explanation:
Under the Fair Labor Standards Act (FLSA), overtime is calculated only on actual hours worked beyond
40 hours per workweek.
Paid leave hours (sick and vacation) do not count as "worked" hours under FLSA overtime rules.
Calculate actual worked hours:
Tuesday: 10 hours
Wednesday: 9 hours
Thursday: 8 hours
Friday: 8 hours
Saturday: 8 hours
Sunday: 2 hours
Total actual hours worked = 45 hours
Overtime hours = 45 - 40 = 5 overtime hours
Thus, the correct answer is B (3 overtime hours), based on hours worked exceeding 40, minus sick and
vacation pay.
Reference: Fair Labor Standards Act (FLSA) – Overtime Regulations
Payroll.org – FLSA Compliance Guidelines
4.Using the following information, calculate the social security tax to be withheld.
A. $138.45
B. $141.47
C. $160.58
D. $202.60
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Answer: B
Explanation:
Social Security tax is calculated at 6.2% of Social Security taxable wages.
Determine taxable wages:
Gross salary = $2,435.76
Subtract pre-tax deductions (Section 125 and HSA):
Medical: $45.00
Dental: $9.00
HSA: $100.00
Taxable wages = $2,435.76 - ($45 + $9 + $100) = $2,281.76
Social Security tax = $2,281.76 × 6.2% = $141.47
Reference: IRS – Social Security and Medicare Tax Guide (Publication 15)
Payroll.org – Social Security Tax Calculation Rules
5.A mechanism which facilitates local tax withholding for an employee who is working abroad, but remains
on the home country’s payroll system and is paid under a tax equalization plan, is called a(n):
A. Certified Payroll
B. Shadow Payroll
C. Off-Cycle Payroll
D. Supplemental Payroll
Answer: B
Explanation:
A shadow payroll is a mechanism used for employees on international assignments who remain on the
home country’s payroll but must comply with host country tax withholding.
The home country employer processes payroll normally, while the host country imposes local tax
liabilities.
The shadow payroll ensures compliance with both home and host country tax regulations.
Option A (Certified Payroll) applies to government contracts.
Option C (Off-Cycle Payroll) refers to out-of-schedule payments.
Option D (Supplemental Payroll) refers to bonus or commission payrolls.
Reference: IRS – International Payroll and Tax Compliance
Payroll.org – Shadow Payroll and Global Taxation Guidelines
6.Which of the following statements is TRUE regarding the pre-notification process?
A. Sent at least five days prior to payday
B. Required prior to direct deposit beginning
C. Verifies the employee's name is on the bank account
D. Involves sending a zero-dollar transaction through ACH
Answer: D
Explanation:
A pre-notification (pre-note) process is used by payroll departments to verify banking details before
initiating direct deposit payments.
A zero-dollar transaction is sent via ACH (Automated Clearing House) to ensure account validity.
This step prevents payment errors and fraudulent transactions.
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Option A is incorrect because pre-notes are usually processed 3–6 days before payday, but not
necessarily five days in all cases.
Option B is incorrect because not all employers require a pre-note before direct deposit begins. Option C
is incorrect because ACH verification does not confirm the employee’s full legal name.
Reference: National Automated Clearing House Association (NACHA) – ACH Pre-Notification Guidelines
Payroll.org – Direct Deposit Compliance Rules
7.The purpose of grossing-up an amount to an employee is to:
A. Calculate and withhold taxes from payment per Form W-4
B. Treat payment as tax-exempt
C. Calculate and pay taxes on behalf of the employee
D. Treat payment as a non-taxable benefit
Answer: C
Explanation:
Grossing up means increasing the payment amount so that the employee receives a specific net amount
after taxes are withheld. Employers pay the taxes on behalf of the employee in such cases.
This is commonly used for:
Relocation reimbursements
Bonus payments
Tax equalization for expatriates
Option A is incorrect because grossing up is done to cover taxes, not to determine withholdings.
Option B is incorrect because grossed-up amounts are taxable, not tax-exempt.
Option D is incorrect because grossed-up payments are always taxable.
Formula:
Reference: IRS Publication 15 – Employer’s Tax Guide
Payroll.org – Gross-Up Calculation Methods
8.The best practice is to start the annual reconciliation after the:
A. W-2 audit is complete
B. End of the first quarter
C. End of the calendar year
D. First payroll of the current year
Answer: A
Explanation:
Annual payroll reconciliation ensures that payroll records match tax filings. The best practice is to start
reconciliation after completing the W-2 audit, as this verifies:
Employee earnings and tax withholdings
Federal and state tax deposits
Year-end adjustments
Option B is incorrect because quarterly reconciliation is separate from annual reconciliation.
Option C is incorrect because reconciliation should start after verifying W-2s, not just at the year-end.
Option D is incorrect because reconciliation should be based on the prior year, not the first payroll of the
new year.
Reference: IRS – Year-End Payroll Reporting Guide
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Payroll.org – Annual Reconciliation Best Practices
9.An exempt employee is being paid an annual discretionarybonus. The employee has submitted a 2020
W-4.
Calculate the net pay based on the following information:
A. $3,117.50
B. $3,267.50
C. $3,603.40
D. $3,932.83
Answer: B
Explanation:
Using the IRS Supplemental Wage Method, the flat tax rate of 22% applies to bonuses:
Federal Income Tax:
$5,000 × 22% = $1,100.00
Social Security Tax:
$5,000 × 6.2% = $310.00
Medicare Tax:
$5,000 × 1.45% = $72.50
State Income Tax:
$5,000 × 5.0% = $250.00
Total Taxes Withheld:
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10.Which form is used by third-party administrators to report sick pay paid on behalf of an employer?
A. Form 941
B. Form 1099
C. Form 8922
D. Form 1095-B
Answer: C
Explanation:
Form 8922, Third-Party Sick Pay Recap, is used when a third-party administrator (TPA) pays sick pay on
behalf of an employer and needs to report taxable wages properly.
This ensures that Social Security, Medicare, and FUTA taxes are correctly allocated between the
employer and third party.
Sick pay is subject to FICA taxes, but not always subject to FUTA if paid directly by an insurer.
Option A (Form 941) is incorrect because it is used for quarterly payroll tax filings. Option B (Form 1099) is
incorrect because sick pay is reported on W-2, not 1099. Option D (Form 1095-B) is incorrect because it
relates to health coverage reporting.
Reference: IRS Form 8922 Instructions – Third-Party Sick Pay Recap
Payroll.org – Sick Pay Taxation Guidelines
11.The FIRST action an employer should take when a natural disaster occurs is:
A. Access payroll and employee information files
B. Determine the well-being of employees
C. Find temporary housing for employees
D. Secure interim office space
Answer: B
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.
Reference: FEMA – Emergency Preparedness Guidelines for Businesses Payroll.org – Disaster
Recovery for Payroll Operations
12.Report backup withholding to the IRS using:
A. Form W-9
B. Form W-2
C. Form 945
D. Form 941
Answer: C
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Explanation:
Form 945 is used by employers to report federal income tax withheld from non-payroll payments,
including backup withholding on:
Payments to independent contractors (when no valid W-9 is provided)
Certain gambling winnings
Dividend and interest payments subject to IRS backup withholding rules
Option A (Form W-9) is incorrect because Form W-9 is used by payees to provide taxpayer identification
numbers (TINs), not for reporting withholding.
Option B (Form W-2) is incorrect because Form W-2 is used for employee wages and withholding, not
backup withholding.
Option D (Form 941) is incorrect because Form 941 reports payroll tax withholdings, not backup
withholding.
Reference: IRS Form 945 Instructions – Annual Return of Withheld Federal Income Tax Payroll.org –
Reporting Backup Withholding
13.Using the following information from a payroll journal, calculate the total Social Security tax liability for
the first payroll of the year:
A. $3,664.20
B. $3,695.20
C. $3,881.20
D. $4,788.90
Answer: C
Explanation:
Social Security tax is 6.2% for both the employer and employee, so total liability is 12.4% of Social
Security taxable wages.
Calculate Social Security taxable wages:
Gross pay: $32,500.00
Less pre-tax deductions (Health Insurance & 401k do NOT reduce Social Security taxable wages):
Taxable Wages = $32,500.00 - $1,200.00 = $31,300.00
Calculate Social Security tax (12.4% total for employer & employee):
$31,300 × 12.4% = $3,881.20
Thus, the correct answer is
C. $3,881.20.
Reference: IRS Publication 15 – Employer’s Tax Guide
Payroll.org – Social Security and Medicare Tax Rules