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Solutions for Payroll Accounting 2023, 5th Edition by Jeanette Landin
Solutions for Payroll Accounting 2023, 5th Edition by Jeanette Landin
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,Payroll Accounting 2019, 5e (Landin)Chapter 1 Payroll Practices and System Fundamentals
1) Internal payroll reports are used to inform a firm's managers and decision-makers about labor
costs.
Answer: TRUE
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
2) The Lilly Ledbetter Act of 2009 was the first act that mandated equal pay for men and women
who perform identical tasks.
Answer: FALSE
Explanation: The Equal Pay Act of 1963 was the first legislation that addressed pay equity.
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
3) The Age Discrimination in Employment Act (ADEA) prohibits discrimination in employment
practices for workers who are older than age 50.
Answer: FALSE
Explanation: ADEA protects workers who are older than age 40.
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Diversity
Accessibility: Keyboard Navigation
4) Payroll-related legislation often reflects emerging issues in societal evolution.
Answer: TRUE
Difficulty: 2 Medium
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Analyze
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
1
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,5) The Worker's Compensation Act of 1935 legislated the payment of worker's compensation
insurance.
Answer: FALSE
Explanation: No federal legislation exists regarding the payment of worker's compensation
insurance.
Difficulty: 1 Easy
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Understand
AACSB: Communication
Accessibility: Keyboard Navigation
6) The ethical principle of due care pertains to the upholding of rights and justice of
stakeholders.
Answer: FALSE
Explanation: The principle of due care pertains to the accountant's professional competence.
Difficulty: 2 Medium
Topic: Discuss the Ethical Guidelines for Payroll Accounting
Learning Objective: 01-03 Discuss the Ethical Guidelines for Payroll Accounting
Bloom's: Apply
AACSB: Ethics
Accessibility: Keyboard Navigation
7) Payroll accounting systems may involve an integrated software package that contains
business-planning tools.
Answer: TRUE
Difficulty: 1 Easy
Topic: Identify Contemporary Payroll Practices
Learning Objective: 01-04 Identify Contemporary Payroll Practices
Bloom's: Understand
AACSB: Technology
Accessibility: Keyboard Navigation
8) The IRS uses EINs to track employers for tax purposes.
Answer: TRUE
Difficulty: 1 Easy
Topic: Identify Contemporary Payroll Practices
Learning Objective: 01-04 Identify Contemporary Payroll Practices
Bloom's: Remember
AACSB: Communication
Accessibility: Keyboard Navigation
2
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,9) The payroll volume tends to be greater for small companies than for large businesses.
Answer: FALSE
Explanation: Payroll volume is lower for small companies because the number of employees is
smaller, which leads to a lower number of payroll transaction.
Difficulty: 1 Easy
Topic: Compare Payroll Processing Options for Different Businesses
Learning Objective: 01-05 Compare Payroll Processing Options for Different Businesses
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
10) The use of outsourced payroll relieves employers of the responsibility for payroll accuracy.
Answer: FALSE
Explanation: The employer is responsible for payroll accuracy regardless of who processes it.
Difficulty: 2 Medium
Topic: Compare Payroll Processing Options for Different Businesses
Learning Objective: 01-05 Compare Payroll Processing Options for Different Businesses
Bloom's: Analyze
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
11) The Age Discrimination in Employment Act of 1967 prevented mandatory retirement for
workers over the age of:
A) 55.
B) 50.
C) 45.
D) 40.
Answer: D
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Diversity
Accessibility: Keyboard Navigation
3
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,12) Which Act extended medical benefits for certain terminated employees?
A) ADEA
B) COBRA
C) OSHA
D) ERISA
Answer: B
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
13) Within how many days after initially commencing work must an employer report a new
employee, according to PRWOR?
A) 7
B) 10
C) 20
D) 30
Answer: C
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Communication
Accessibility: Keyboard Navigation
14) The Sarbanes-Oxley Act legislated penalties for violations of which Act?
A) HIPAA
B) ERISA
C) PRWOR
D) DOMA
Answer: B
Difficulty: 2 Medium
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
4
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,15) The U.S. v. Windsor case repealed an Act and affected payroll tax withholdings for certain
employees. Which Act did Windsor repeal?
A) OSHA
B) ARRA
C) ATRA
D) DOMA
Answer: D
Difficulty: 1 Easy
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Understand
AACSB: Diversity
Accessibility: Keyboard Navigation
16) The purpose of payroll legislation is to:
A) Increase the complexity involved in compensating employees.
B) Protect the rights of employees by legislating workplace equity.
C) Generate increased tax revenue for governmental entities.
D) Promote governmental involvement in business activities.
Answer: B
Difficulty: 3 Hard
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Evaluate
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
17) According to FMLA, during the time that an employee is on family leave:
A) The employer must not contact the employee during the leave.
B) The employee is responsible for staying in touch with the employer.
C) The employer may make changes to the employee's benefits.
D) The employer is responsible for alerting the employee to changes in processes and benefits.
Answer: D
Difficulty: 3 Hard
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Evaluate
AACSB: Communication
Accessibility: Keyboard Navigation
5
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,18) The USERRA legislation provided the following:
A) Military service members receive mandatory priority during the hiring process.
B) Military service members receive preferential treatment for promotions and raises during the
normal course of business.
C) Military members must receive the same promotions and compensation that they would have
received when they return from active duty.
D) Injured military veterans must be allowed to return to work, but their compensation may be
reduced based on their disability.
Answer: C
Difficulty: 2 Medium
Topic: Identify Legislation That Pertains to Payroll and Business
Learning Objective: 01-01 Identify Legislation That Pertains to Payroll and Business
Bloom's: Analyze
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
19) Payroll taxes were instituted by the 16th Amendment to the United States Constitution:
A) To pay for governmental salaries.
B) To make money from businesses that had employees.
C) To fund infrastructure improvements of booming cities.
D) To penalize people who needed employment.
Answer: C
Difficulty: 3 Hard
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Analyze
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
20) Employment legislation during the 1930s included which of the following Acts:
A) FLSA, FUTA, and FICA.
B) ADEA, Davis-Bacon Act, and FLSA.
C) Walsh-Healey Act, FICA, and ERISA.
D) FUTA, ADA, and FLSA.
Answer: A
Difficulty: 2 Medium
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
6
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,21) The main purpose of the Federal Insurance Contributions Act (FICA) was to:
A) Provide health insurance for all employees.
B) Mandate worker's compensation insurance for employers.
C) Provide life insurance for all employees.
D) Provide benefits for workers who were unable to work because of age, disability, or death.
Answer: D
Difficulty: 2 Medium
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
22) Which Act governs the minimum wage that must be paid to nonexempt workers?
A) FICA
B) FLSA
C) FUTA
D) SSA
Answer: B
Difficulty: 1 Easy
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
23) The Fair Labor Standards Act contains provisions for:
A) Overtime pay, minimum wage, and working conditions.
B) Full-time workers, part-time workers, and independent contractors.
C) Minimum wage, maximum wage, and overtime pay.
D) Pay periods, paid time off, and minimum wage.
Answer: A
Difficulty: 1 Easy
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
7
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
,24) The Current Tax Payment Act changed employer remittance of taxes by:
A) Instituting the mandatory transfer of payroll tax liabilities.
B) Legislating the amounts of tax withheld from each employee.
C) Requiring employers to remit taxes at specific times during the year.
D) Calling for employers to remit only the current portions of taxes due.
Answer: C
Difficulty: 1 Easy
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Understand
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
25) Worker's compensation insurance premiums:
A) Are the same amount for all employees of a company, regardless of employee task.
B) Are remitted in full at the end of the year to ensure accuracy.
C) Are mandated by the Fair Labor Standards Act.
D) Are governed by state laws and vary according to worker job classification.
Answer: D
Difficulty: 2 Medium
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Analyze
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
26) The classification of workers as exempt and nonexempt pertains to the provisions of the:
A) Social Security Act.
B) Equal Pay Act.
C) Fair Labor Standards Act.
D) Federal insurance Contributions Act.
Answer: C
Difficulty: 1 Easy
Topic: Discuss the Legal Framework Specific to Payroll Accounting
Learning Objective: 01-02 Discuss the Legal Framework Specific to Payroll Accounting
Bloom's: Remember
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
8
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
, 27) Which of the following is among the guidelines for the AICPA Code of Ethics?
A) Company Interest
B) Corporate Profitability
C) Due Care
D) Interdependence
Answer: C
Difficulty: 1 Easy
Topic: Discuss the Ethical Guidelines for Payroll Accounting
Learning Objective: 01-03 Discuss the Ethical Guidelines for Payroll Accounting
Bloom's: Remember
AACSB: Ethics
Accessibility: Keyboard Navigation
28) The payroll accountant for Candor, Inc. was found to have issued payroll checks in the name
of several terminated employees. Upon investigation, the checks were all deposited to the same
bank account, which was owned by the payroll accountant. Which ethical principle did the
payroll accountant violate?
A) Responsibilities
B) Public Interest
C) Objectivity and Independence
D) Integrity
Answer: D
Difficulty: 3 Hard
Topic: Discuss the Ethical Guidelines for Payroll Accounting
Learning Objective: 01-03 Discuss the Ethical Guidelines for Payroll Accounting
Bloom's: Evaluate
AACSB: Ethics
Accessibility: Keyboard Navigation
29) Leslie is the accountant for a major movie production. She is approached by a group of
people from the press who ask her questions about the salaries of the actors and actresses
involved in the film. According to the AICPA Code of Ethics, which principle most closely
governs the appropriate conduct in this situation?
A) Responsibilities
B) Due Care
C) Integrity
D) Public Interest
Answer: A
Difficulty: 3 Hard
Topic: Discuss the Ethical Guidelines for Payroll Accounting
Learning Objective: 01-03 Discuss the Ethical Guidelines for Payroll Accounting
Bloom's: Evaluate
AACSB: Ethics
Accessibility: Keyboard Navigation
9
Copyright © 2019 McGraw-Hill Education. All rights reserved.
No reproduction or distribution without the prior written consent of McGraw-Hill Education.
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