CFL Test UPDATED Exam Questions and
CORRECT Answers
Payroll equation - CORRECT ANSWER- calculation of net pay from gross pay minus
deductions
Gross pay - CORRECT ANSWER- total earnings before deductions and taxes
net pay - CORRECT ANSWER- earnings after deductions and taxes
Income tax - CORRECT ANSWER- Tax paid to the state, federal, and local governments
based on income earned over the past year.
Allowance - CORRECT ANSWER- amount subtracted from gross pay to determine taxable
income
dependent - CORRECT ANSWER- A person who relies on the taxpayer for financial support
social security - CORRECT ANSWER- federal program of disability and retirement benefits
that covers most working people
medicare - CORRECT ANSWER- A federal program of health insurance for persons 65 years
of age and older
FICA - CORRECT ANSWER- Federal Insurance Contributions Act
pay period - CORRECT ANSWER- the amount of time over which an employee is paid
YTD - CORRECT ANSWER- year-to-date ; amount you have earned or paid in the year so
far
CORRECT Answers
Payroll equation - CORRECT ANSWER- calculation of net pay from gross pay minus
deductions
Gross pay - CORRECT ANSWER- total earnings before deductions and taxes
net pay - CORRECT ANSWER- earnings after deductions and taxes
Income tax - CORRECT ANSWER- Tax paid to the state, federal, and local governments
based on income earned over the past year.
Allowance - CORRECT ANSWER- amount subtracted from gross pay to determine taxable
income
dependent - CORRECT ANSWER- A person who relies on the taxpayer for financial support
social security - CORRECT ANSWER- federal program of disability and retirement benefits
that covers most working people
medicare - CORRECT ANSWER- A federal program of health insurance for persons 65 years
of age and older
FICA - CORRECT ANSWER- Federal Insurance Contributions Act
pay period - CORRECT ANSWER- the amount of time over which an employee is paid
YTD - CORRECT ANSWER- year-to-date ; amount you have earned or paid in the year so
far
