An Introduction to Payroll Administration 3Rd Canadian Edition By Alan Dryden - Test Bank

An Introduction to Payroll Administration 3Rd Canadian Edition By Alan Dryden – Test Bank

 

Instant Download – Complete Test Bank With Answers

 

 

Sample Questions Are Posted Below

 

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

 

[QUESTION]

4. If a sales clerk is short on their till at the end of the night, the employer can deduct the amount of the shortage off their next pay.

Ans: False

Learning Objective: 05-02

Topic: 05-03

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

5. If a gas attendant is on duty at the time when a customer leaves without paying, the employer can deduct the amount of the lost payment off their next pay.

Ans: False

Learning Objective: 05-02

Topic: 05-03

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

6. If group insurance premiums are partially paid by the employee and the employee has acknowledged this deduction in writing, the employer can deduct the cost directly from each pay.

Ans: True

Learning Objective: 05-02

Topic: 05-03

Difficulty: Easy

Accessibility: Keyboard Navigation

 

[QUESTION]

7. Defined contribution benefit plans are valued by employees because the payment at the retirement is known in advance.

Ans: False

Learning Objective: 05-02

Topic: 05-03

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

8. Employees bear the risk of market fluctuation when they have defined benefit pension plans.

Ans: False

Learning Objective: 05-02

Topic: 05-03

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

9. Employees bear the risk of market fluctuation when they have defined contribution pension plans.

Ans: True

Learning Objective: 05-02

Topic: 05-03

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

10. Employer optional deductions such as social club memberships should be deducted first, before statutory deductions are made in case the employee runs out of money to cover off the extras.

Ans: False

Learning Objective: 05-03

Topic: 05-05

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

11. Until the money is due, deductions taken off employee payments can be used to cover operating expenses for the business.

Ans: False

Learning Objective: 05-03

Topic: 05-05

Difficulty: Easy

Accessibility: Keyboard Navigation

 

 

Multiple Choice

 

 

[QUESTION]

12. If gross earnings less statutory deductions for an employee in Ontario with a family support Garnishment Order equal $1500, what is the maximum amount that can be deducted for the Order?
13. $1500
14. $1250
15. $750
16. $300
17. $0

Ans: C

Learning Objective: 05-01

Topic: 05-02

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

13. If gross earnings less statutory deductions for an employee in Ontario with a non-family support Garnishment Order equal $1500, what is the maximum amount that can be deducted for the Order?
14. $1500
15. $1250
16. $750
17. $300
18. $0

Ans: D

Learning Objective: 05-01

Topic: 05-02

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

14. What is the maximum amount, by percentage, that a family support order may direct the employer to with-hold?
15. 10%
16. 20%
17. 30%
18. 40%
19. 50%

Ans: E

Learning Objective: 05-03

Topic: 05-02

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

15. An employee with an outstanding family support Garnishment Order asks you to allow him to make his RRSP contributions before the available garnishment amount is calculated. You must:
16. Agree and do as asked as it is his pay
17. Calculate the amount after all statutory deductions are applied
18. Calculate the amount after all deductions are applied including voluntary
19. Terminate the employee immediately for trying to skip out on his family responsibilities
20. Contact his supervisor immediately and inform him about the terms of the Garnishment Order

Ans: B

Learning Objective: 05-03

Topic: 05-05

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

16. The following is not an example of a statutory deduction.
17. Federal Taxes
18. Provincial Taxes
19. Canada Pension Plan Contributions
20. Employment Insurance Premiums
21. Union Dues

Ans: E

Learning Objective: 05-01

Topic: 05-01

Difficulty: Easy

Accessibility: Keyboard Navigation

 

[QUESTION]

17. If an employee disagrees with the terms outlined in a Garnishment Order the payroll administrator should:
18. Cease all deductions until the issue is resolved
19. Contact the court to discuss the employee objection
20. Continue to follow the terms of the order until advise by the court otherwise
21. Deduct additional amounts in case the employee decides to quit over the disagreement
22. Follow directions provided by the employee regarding how they would like the matter handled

Ans: C

Learning Objective: 05-01

Topic: 05-02

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

18. A Garnishment Order may not be issued by:
19. Canada Revenue Agency
20. A Credit Union (where the member has signed an Assignment of Wages)
21. Creditors (where the member has signed an Assignment of Wages)
22. The Federal Court of Canada
23. Small Claims Court

Ans: C

Learning Objective: 05-01

Topic: 05-02

Difficulty: Moderate

Accessibility: Keyboard Navigation

 

[QUESTION]

19. The following statement is not true regarding employer sponsored Registered Retirement Savings Plans.
20. The final retirement benefit is known in advance.
21. Allow employers to reduce taxes from source deductions.
22. Fees are usually lower than for individuals.
23. Contributions may be made by the employer, the employee or both depending on the structure of the plan.
24. Employee access is often limited to the principal or interest income prior to retirement.

Ans: A

Learning Objective: 05-02

Topic: 05-03

Difficulty: Easy

Accessibility: Keyboard Navigation

 

[QUESTION]

20. An employee has a family support order demanding $500 per weekly pay be with-held. If the employee has a gross taxable income of $1000, can the full amount be deducted on this pay?
21. Yes
22. No
23. Maybe, if the employee does not have any voluntary deductions
24. Maybe, if the employee has many tax credits
25. There isn’t enough information to say for sure

Ans: B

Learning Objective: 05-01, 05-03

Topic: 05-02

Topic: 05-05

Difficulty: Difficult

Accessibility: Keyboard Navigation

 

 

Short Answer

 

 

[QUESTION]

21. Name the 3 Statutory Deductions in Canada.

Ans: 1. Canada/Quebec Pension Plan Contributions
2. Employment Insurance Premiums
3. Income Taxes

Learning Objective: 05-01

Topic: 05-01

Difficulty: Easy

 

[QUESTION]

22. What steps are recommended when a Garnishment Order is received by the employer?

Ans: Contact the court immediately if the employee is unknown or no longer works for you.
Provide the employee with a copy of the Order in a confidential manner.
If the employee objects to the with-holding, advise them to contact the court and let them know that you have no option but to follow the Order.
Carefully review the terms of the Order and speak to the court if in doubt on how to comply.
Follow the instructions explicitly.
Begin deductions with the next pay cycle.
Notify the court immediately if an interruption of earnings occurs.

Learning Objective: 05-01

Topic: 05-02

Difficulty: Easy

 

[QUESTION]

23. What should be acknowledged in the employee written permission for employer optional deductions?

Ans: Name and address of payee
Purpose of payment
Amount of payment, including frequency and total amount if appropriate
The date of signing as well as any termination date for the deductions

Learning Objective: 05-03

Topic: 05-04

Difficulty: Easy

 

[QUESTION]

24. List 3 examples of employer optional deductions that may be authorized by the employer for the employee’s benefit.

Ans: Solution can include any combination of the following (or others):
Canada Savings Bonds
Provincial Savings Bonds
Parking Fees
Employer sponsored social funds
Charities such as United Way and the Red Cross
Gym membership payments

Learning Objective: 05-03

Topic: 05-04

Difficulty: Easy

 

[QUESTION]

25. List the order of priority of deductions for an employee.

Ans: Statutory deductions (CPP, EI and Taxes)
Garnishment Orders and other legally binding orders
Employee compulsory
Employee voluntary deductions

Learning Objective: 05-03

Topic: 05-05

Difficulty: Moderate