APA APA Payroll Technology & Systems 2 — Questions and Answers
Question 1: What is the purpose of a payroll reconciliation report generated by payroll software?
- To schedule future pay dates
- To verify that payroll totals match general ledger entries (Correct answer)
- To print employee pay stubs
- To calculate vacation accruals
Correct answer: To verify that payroll totals match general ledger entries
A payroll reconciliation report confirms that payroll amounts posted to the general ledger match actual payroll disbursements and tax liabilities.
Question 2: In payroll systems, what does a 'positive pay' file submitted to a bank help prevent?
- Duplicate direct deposits
- Check fraud by verifying check details before payment (Correct answer)
- Late tax deposits
- Overpayment of salaries
Correct answer: Check fraud by verifying check details before payment
A positive pay file sends issued check details to the bank, which then matches presented checks against the file to detect unauthorized or altered checks.
Question 3: Which data element is essential in a payroll master record to ensure correct federal tax withholding?
- Employee's social media handle
- Employee's W-4 filing status and allowances (Correct answer)
- Employee's hire date only
- Employee's department code only
Correct answer: Employee's W-4 filing status and allowances
The W-4 filing status and withholding information directly determines the federal income tax withheld from each paycheck.
Question 4: What is the recommended approach when a payroll software vendor issues a critical tax table update mid-year?
- Wait until year-end to apply the update
- Apply the update immediately before the next payroll run (Correct answer)
- Ignore the update if payroll has been running correctly
- Contact the IRS before applying any updates
Correct answer: Apply the update immediately before the next payroll run
Critical tax table updates should be applied before the next payroll run to ensure withholding calculations comply with current IRS rates and brackets.
Question 5: Which reporting feature in payroll software helps identify employees who have not yet submitted a new W-4 after a life event?
- Turnover report
- Stale W-4 or missing W-4 exception report (Correct answer)
- Overtime summary report
- Benefits cost report
Correct answer: Stale W-4 or missing W-4 exception report
A stale or missing W-4 exception report flags employees whose withholding information may be outdated or incomplete.
Question 6: When moving payroll data from a legacy system to a new platform, which step is most important to perform before go-live?
- Delete all legacy data immediately
- Validate migrated employee and earnings data for accuracy and completeness (Correct answer)
- Notify all employees of the system change
- Upgrade hardware servers first
Correct answer: Validate migrated employee and earnings data for accuracy and completeness
Data validation ensures that all employee records, earnings history, and tax data transferred correctly, preventing payroll errors after go-live.
APA APA Payroll Technology & Systems 2
What is the purpose of a payroll reconciliation report generated by payroll software?