An Introduction to Payroll Administration 3rd Canadian Edition By Alan Dryden – Test Bank
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Sample Test
File: Chapter 03 Test Bank
True/False
[QUESTION]
1. The
pay cycle is determined by the Canada Revenue Agency and cannot be altered by
the employer.
Ans: False
Learning Objective: 03-01
Topic: 03-02
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
2. The
employment contract may express payment in any method imagined (for example:
per hour, per year, per unit, per dollar sold, per telephone call, per page
written, etc.).
Ans: True
Learning Objective: 03-01
Topic: 03-02
Difficulty: Easy
Accessibility: Keyboard Navigation
[QUESTION]
3. Employees
who earn a salary can be asked to work more than 44 hours in a week without
being entitled to overtime pay.
Ans: False
Learning Objective: 03-01
Topic: 03-04
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
4. To
qualify as a taxable benefit the employee must receive something that is of a personal
benefit to them.
Ans: True
Learning Objective: 03-02
Topic: 03-06
Difficulty: Easy
Accessibility: Keyboard Navigation
[QUESTION]
5. Mary
has a job as waitress at a small restaurant. Tips are pooled in a jar and
distributed back to employees at the end of each shift by the manager. These
tips are not considered taxable income because they are funded by the patrons
rather than the owner of the business.
Ans: False
Learning Objective: 03-02
Topic: 03-08
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
6. Rachel
works at Taco Bell and receives a free meal at the end of each shift. This meal
must be included in her pay calculation as a taxable benefit.
Ans: True
Learning Objective: 03-02
Topic: 03-08
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
7. Amblake
Co. offers a $500 prize to employees who have completed a voluntary survey to
help them gather information about employee engagement. This bonus does not
have to be taxed.
Ans: False
Learning Objective: 03-02
Topic: 03-08
Difficulty: Moderate
Accessibility: Keyboard Navigation
Multiple Choice
[QUESTION]
8. If an
employee earns a salary of $58,500 per year, their weekly pay cycle salary
would be:
9. $4,875.00
10.
$2,437.50
11.
$2,250.00
12.
$1,125.00
13.
$562.50
Ans: D
Learning Objective: 03-01
Topic: 03-02
Topic: 03-04
Difficulty: Easy
Accessibility: Keyboard Navigation
[QUESTION]
9. If an
employee earns a salary of $58,500 per year, their semi-monthly pay cycle
salary would be:
10.
$4,875.00
11.
$2,437.50
12.
$2,250.00
13.
$1,125.00
14.
$562.50
Ans: B
Learning Objective: 03-01
Topic: 03-02
Topic: 03-04
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
10.
If Mary earns $260,000 per year how much does she earn per week?
11.
$10,000
12.
$5,000
13.
$260,000
14.
$2,500
15.
$6,000
Ans: B
Learning Objective: 03-01
Topic: 03-04
Difficulty: Easy
Accessibility: Keyboard Navigation
[QUESTION]
11.
If Sue earns $55 per hour and works 15 hours, what is her gross
pay for the period?
12.
$825
13.
$750
14.
$55
15.
$15
16.
$1,235.70
Ans: A
Learning Objective: 03-01
Topic: 03-03
Difficulty: Easy
Accessibility: Keyboard Navigation
[QUESTION]
12.
An example of a taxable benefit would be:
13.
Tuition paid for a WordPress course required for work.
14.
Use of a company car while working.
15.
An ergonomic chair provided for the employee to use at the
office.
16.
A paid gym membership.
17.
Airline tickets to travel to an office event.
Ans: D
Learning Objective: 03-02, 03-03
Topic: 03-06
Topic: 03-14
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
13.
Reimbursement of costs covered by employees on behalf of the
employer such as travel expenses and meal allowances:
14.
Are reported as part of gross wages.
15.
Increase the employee’s taxable income.
16.
Typically are paid through Accounts Payable and do not impact deductions.
17.
Must be reported on a T4 to the Canada Revenue Agency.
18.
Must be below $300 per person per calendar year.
Ans: C
Learning Objective: 03-02
Topic: 03-05
Topic: 03-12
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
14.
The following is not an example of a taxable allowance:
15.
Cash paid to an employee to purchase normal clothing to wear on
the job.
16.
Cash paid to cover living expenses.
17.
Cash paid to cover the cost of personal vehicle which may be
used for company business.
18.
Cash paid to cover travel expenses such as hotels, airfare,
taxis, meals, etc.
19.
Cash paid to cover entertainment costs not for the benefit of
the company.
Ans: D,E
Learning Objective: 03-02
Topic: 03-05
Difficulty: Easy
Accessibility: Keyboard Navigation
[QUESTION]
15.
Cell phone service paid for by the employer for the employee’s
personal use is:
16.
Not taxable
17.
Taxable with CPP and EI deductions
18.
Taxable with CPP deductions but not EI
19.
Taxable with EI deductions but not CPP
20.
Not taxable but subject to CPP deductions
Ans: C
Learning Objective: 03-02, 03-03
Topic: 03-06
Topic: 03-14
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
16.
Use of a company gym on site (recreational facility) is:
17.
Not taxable
18.
Taxable with CPP and EI deductions
19.
Taxable with CPP deductions but not EI
20.
Taxable with EI deductions but not CPP
21.
Not taxable but subject to CPP deductions
Ans: C
Learning Objective: 03-02, 03-03
Topic: 03-06
Topic: 03-14
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
17.
Payments for guests travelling with an employee, in cash are:
18.
Not taxable
19.
Taxable with CPP and EI deductions
20.
Taxable with CPP deductions but not EI
21.
Taxable with EI deductions but not CPP
22.
Not taxable but subject to CPP deductions
Ans: B
Learning Objective: 03-02, 03-03
Topic: 03-06
Topic: 03-14
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
18.
Cash reimbursement for money spent to pay for office supplies
such as postage stamps are:
19.
Not taxable
20.
Taxable with CPP and EI deductions
21.
Taxable with CPP deductions but not EI
22.
Taxable with EI deductions but not CPP
23.
Not taxable but subject to CPP deductions
Ans: A
Learning Objective: 03-02, 03-03
Topic: 03-06
Topic: 03-14
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
19.
This information is not required in order to calculate the
automobile taxable benefit for employees who are permitted to use company owned
cars for personal use.
20.
The total number of kilometres driven.
21.
The total amount of business kilometres driven.
22.
The purchase price of the automobile.
23.
The cost of gas for personal driving.
24.
The amount of money reimbursed to the employer by the employee
for personal use.
Ans: D
Learning Objective: 03-02
Topic: 03-07
Difficulty: Moderate
Accessibility: Keyboard Navigation
[QUESTION]
20.
The CEO of Amblake Co. would like to offer free parking to all
employees in a prime downtown space. What impact will this have on their pay?
21.
No impact.
22.
Will increase their rate of pay per hour.
23.
Will reduce their net income by the full value of the parking
space.
24.
Will result in lower statutory deductions.
25.
Will result in higher statutory deductions.
Ans: E
Learning Objective: 03-02
Topic: 03-06
Difficulty: Difficult
Accessibility: Keyboard Navigation
Short Answer
[QUESTION]
21.
Fred Vedaro is paid bi-weekly and earns $15 per hour with
overtime paid after 44 hours in one week. Fred works 48 hours in the first week
and 39 in the second. Vacation pay at 4% will be paid on each pay cycle.
Calculate Fred’s gross wages for this two week period.
Ans:
|
Type of Wage |
Calculation |
Amount $1,245.00 |
|
Overtime Vacation Pay |
Week 1 – 4 hours 4% of ($1245.00 + $90.00= $1,335.00) |
$90.00 $53.40 |
|
Total Wages |
|
$1,388.40 |
Learning Objective: 03-01
Topic: 03-03
Difficulty: Moderate
[QUESTION]
22.
Martha Jovia is paid weekly and earns $25 per hour with overtime
paid after 44 hours in one week or 8 hours in one day. Martha worked 4 hours on
Sunday, 8 hours on Monday, 10 on Tuesday, 7 on Wednesday and nothing for the
remainder of the week. Vacation pay at 6% will be paid on each pay cycle. She
also earns a shift premium of 5% for each hour worked on a weekend. Calculate
Martha’s gross wages for this one week period.
Ans:
|
Type of Wage |
Calculation |
Amount |
|
Regular |
Sunday – 4 hours |
$675.00 |
|
Overtime Shift Premium |
Tuesday – 2 hours Total Sunday – 5 hours Total 5 hours at 5% x $25/ hour |
$75.00 $6.25 |
|
Vacation Pay Total Wages |
6% of ($675.00 + $75.00 + $6.25) |
$45.38 $801.63 |
Learning Objective: 03-01
Topic: 03-03
Difficulty: Moderate
[QUESTION]
23.
List 3 examples of taxable benefits.
Ans: Solutions could include:
Personal use of an employer vehicle.
Premiums paid by the employer for life insurance.
Parking fees paid by the employer when a vehicle is not required for the job.
Interest-free loans.
RRSP contributions by the employer.
Learning Objective: 03-02
Topic: 03-06
Difficulty: Easy
[QUESTION]
24.
What information is required to utilize the Canada Revenue
Agency online calculator of the automobile taxable benefit?
Ans: The original cost of the vehicle
The number of months access is provided in the year.
The total number of kilometres driven.
The total number of kilometres driven for business purposes.
The amount of money reimbursed by the employee to the employer for personal
use.
Learning Objective: 03-02
Topic: 03-07
Difficulty: Easy
[QUESTION]
25.
Frank Hill works for a company with a semi-monthly pay cycle. He
earns $80,000 per year and receives over-time paid at time and a half for any
approved hours worked in excess of 40 hours per week. He receives a parking
allowance of $100 per month and is paid $25 per hour for working on-call on
weekends.
During this pay cycle Frank worked 9 hours of approved over-time
this pay cycle and was on-call for 10 hours on Saturday. Calculate Frank’s
gross earnings for this pay cycle.
Ans:
|
Type of Wage |
Calculation |
Amount |
|
Regular |
$80,000 ÷ 24 pay periods |
$3,333.33 |
|
Overtime |
$80,000 ÷ (40*52) |
$519.21 |
|
Parking Allowance |
$100 x 12 ÷ 24 |
$50.00 |
|
On Call Pay |
$25/hour x 10 hours |
$250.00 |
|
Gross Earnings |
|
$4,152.54 |
Learning Objective: 03-01, 03-02, 03-03
Topic: 03-04
Topic: 03-06
Topic: 03-14
Difficulty: Difficult
[QUESTION]
26.
Sophie Gowna works for a company with a bi-weekly pay cycle. She
earns $30 per hour and receives over-time paid at time and a half for any hours
worked over 37.5 in one week. Sophie receives a cash company car allowance of
$300 per month and is paid 8% vacation pay on hours worked. She also is
receiving a $973.45 cash reimbursement of travel expenses incurred for the company
last month. During this pay cycle Sophie worked 40 hours in the first week and
35 hours in the second. Calculate Sophie’s gross earnings for this pay cycle.
Ans:
|
Type of Wage |
Calculation |
Amount |
|
Regular |
37.5 hours in Week 1 and 35 hours in
Week 2 at $30/hour |
$2,175.00 |
|
Overtime |
(40-37.5) = 2.5 hours in Week 1 |
$112.50 |
|
Car Allowance |
$300 x 12 ÷ 26 |
$138.46 |
|
Vacation Pay |
8% of ($2,175.00 + 112.50 = |
$183.00 |
|
Expense Reimbursement |
Not paid through payroll |
$0.00 |
|
Gross Earnings |
|
$2,608.96 |
Learning Objective: 03-01, 03-02, 03-03
Topic: 03-04
Topic: 03-06
Topic: 03-14
Difficulty: Difficult
File: Chapter 05 Test Bank
True/False
[QUESTION]
1. Employees
do not need to be notified when court order with-holdings are requested since
they should be aware of the situation already.
Ans: False
Learning Objective: 05-01
Topic: 05-01
Difficulty: Easy
Accessibility: Keyboard Navigation
[QUESTION]
2. Employers
should maintain documentation showing that employees have accepted any required
non-statutory deductions.
Ans: True
Learning Objective: 05-01
Topic: 05-01
Difficulty: Easy
Accessibility: Keyboard Navigation
[QUESTION]
3. Finding
out that an employee has an outstanding court order related to unpaid debts can
be upsetting to the employer and is grounds for termination of employment.
Ans: False
Learning Objective: 05-01
Topic: 05-02
Difficulty: Moderate
Accessibility: Keyboard Navigation
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