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WorldatWork Regulatory Environments for Compensation Programs Sample Questions:

1. Which statement is most accurate regarding the effect of taxation on the benefits that employers offer?

A) Taxation has no effect on employee benefits; employers offer benefits for competitive reasons only.
B) Taxation is the primary reason that employers offer benefits; in the absence of tax incentives, employers would be unlikely to offer them.
C) Taxation affects the level of benefits offered, the source of benefits and the employer/employee cost- sharing basis.

2. The Alpha company ships an order to a customer on March 1st and invoices the customer for the product with the shipment, with payment terms of net 30 days. The customer's payment is received on April 5th. The payment clears the bank and shows on Alpha's account on April 8th. If Alpha is using accrual accounting, when does it record the revenue for this sale?

A) March 31st
B) April 8th
C) April 5th
D) March 1st

3. Which of the following are the two primary elements of benefits?

A) Unemployment and disability
B) Pay for time not worked and income protection programs
C) Defined contribution and defined benefits plans
D) Mental health coverage and health care coverage

4. Which of the following best describes present value?

A) The current value of holdings and how much it will grow over time at a given rate of return
B) The difference between the desired value in the future and the current value as a percentage of the desired value
C) The current value of holdings
D) The desired value in the future and what needs to be invested today to realize that amount

5. What is the most accurate statement regarding forecasting?

A) It is done primarily by using historical revenue and expense data.
B) It uses internal and external factors to help answer questions about business expectations for the future.
C) It is a precise estimate of what the future holds for the organization.
D) It is done primarily by evaluating market conditions and economic indicators.

Solutions: