Free APA FPC-Remote Practice Exam with Questions & Answers

Comprehensive and Detailed Explanation:Employersmust allocate tipsif the total reported tips areless than 8% of gross receiptsfor establishmentswhere tipping is customary.

Allocated tips are reported on Form W-2, Box 8 (Option C)butare NOT subject to withholding.

Option A is incorrectbecause allocated tipsare not subject to automatic withholding unless voluntarily reported by the employee.

Option B is incorrectbecauseemployers are responsible for accurate tip reporting.

Option D is incorrectbecause tip allocation rulesrequire reporting when applicable.

Comprehensive and Detailed Explanation:Form 8922, Third-Party Sick Pay Recap,is used when athird-party administrator (TPA)payssick payon behalf of an employer and needs toreport taxable wages properly.

This ensures thatSocial Security, Medicare, and FUTA taxesare correctly allocated between theemployer and third party.

Sick pay is subject to FICA taxes, butnot always subject to FUTAif paid directly by an insurer.

Option A (Form 941)is incorrect because it is used forquarterly payroll tax filings.

Option B (Form 1099)is incorrect becausesick pay is reported on W-2, not 1099.

Option D (Form 1095-B)is incorrect because it relates tohealth coverage reporting.

Comprehensive and Detailed Explanation:Constructive receiptmeans an employee isconsidered paidwhen wages aremade available without restriction, even if they do not physically receive the money.

Option A (On the paycheck date)is incorrect because the date of the paycheck does not determinewhen wages are constructively received.

Option B (When cashed)is incorrect because an employee isconsidered paid before they cash the check.

Option C (When ACH file is created)is incorrect because the wages are not yet available to the employee.

Option D is correct because once wages are accessible (direct deposit or paycheck available for pickup), the IRS considers them "received" for tax purposes.

Comprehensive and Detailed Explanation:Independent contractors do NOT receive a salary.They:

Invoice for services renderedrather than receivingfixed wages.

Risk profit or loss(Option B) based on how they manage expenses.

Can hire assistants(Option C) to help complete tasks.

Can end the relationship at any time(Option D) unless bound by a contract.

Option A (Receive a salary) is incorrectbecausesalaries are paid only to employees, not independent contractors.

Comprehensive and Detailed Explanation:State Unemployment Tax Act (SUTA) liabilityis determined based onwhere an employee works and receives direction from, not necessarily where a company is incorporated.

Thekey factors for determining SUTA stateinclude:

Base of Operations (Option A)– Where the employee works.

Employee’s Residency (Option B)– If an employee works in multiple states, residency may be considered.

Place of Direction or Control (Option C)– The state where the employermanages and directsthe employee.

Option D (State of Incorporation) is incorrectbecause SUTA is determined bywork location, not company registration.

Step 1: Calculate regular wages

40 hours × $10.00 =$400.00

Step 2: Calculate overtime wages

10 hours × ($10.00 × 1.5) =$150.00

Step 3: Calculate piece-rate earnings

35 units × $5.00 =$175.00

Step 4: Total gross pay$400.00 + $150.00 + $175.00 =$742.50

References:

FLSA Overtime Calculation Guide (DOL)

Comprehensive and Detailed Explanation:Social Security tax is calculated as6.2%ofSocial Security taxable wages.

Calculate biweekly gross pay:

Monthly salary =$3,100.00

Biweekly pay=($3,100 × 12) ÷ 26 = $1,430.77

Subtract pre-tax deductions (Medical & 401k):

Taxable wages =$1,430.77 - ($85 + $43) = $1,302.77

Calculate Social Security tax (6.2%):

$1,302.77 × 6.2% = $80.77

Thus, the correct answer isB. $86.04.

Comprehensive and Detailed Explanation:Thepayroll control processensures accuracy and compliance by verifying records, preventing fraud, and reconciling financial transactions.

Batch Totals (Option A)– Used to verifytransaction accuracy.

System Edits (Option B)– Automated controls toprevent errors.

Balancing & Reconciliation (Option D)– Ensures payrollmatches financial records.

Option C (Unauthorized Overtime) is incorrectbecauseovertime management is an operational issue, not a control process.

Comprehensive and Detailed Explanation:Under IRS regulations,employees must report tips totaling $20 or more per month to their employer by the 10th day of the following month.

Employee received $200.10 in tips in July.

Tip income must be reported by August 10.

Option B (September 10), Option C (September 30), and Option D (December 31) are incorrectbecause the IRS mandatesmonthly reporting.

Comprehensive and Detailed Explanation:Non-operating expensesare costsnot directly relatedto the core operations of a business.

Option A (Insurance) is an operating expensebecause it is necessary to protect business assets.

Option C (Legal fees) is an operating expenseif related to business operations.

Option D (Utilities) is an operating expensebecause they are required to keep business operations running.

Option B (Interest paid on income taxes) is a non-operating expensebecause it isnot part of daily business operationsbut rathera financial or tax-related cost.