Financial Analysis & Reporting Flashcards
7 cards from real CPS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Financial Analysis & Reporting flashcards as text
A payroll analyst calculates that the average cost per payroll transaction increased 15% year-over-year. Which metric does this represent?
Answer: Payroll processing efficiency metric
The cost per payroll transaction is a payroll processing efficiency metric that measures the operational cost of running each payroll cycle.
Under GAAP, a company must accrue a liability for employee bonuses that are probable and estimable. In which period should this accrual be recorded?
Answer: In the period the bonus is earned by employees
GAAP's matching principle requires bonus expense to be recognized in the period employees earn it, regardless of when payment is made.
A payroll department uses a trend analysis comparing monthly payroll costs over 12 months. This is primarily used to:
Answer: Identify patterns, seasonality, or anomalies in labor spending
Trend analysis over time reveals patterns, seasonal fluctuations, or unexpected spikes in payroll costs that require investigation.
Which form must employers file annually to reconcile total Social Security wages, Medicare wages, and federal income tax withheld for the entire year?
Answer: Form W-3
Form W-3 is the transmittal form accompanying W-2s that summarizes total wages, tips, and tax information for all employees for the calendar year.
If a company's payroll department prepares a report showing total compensation expense segmented by exempt vs. non-exempt employees, what compliance purpose does this serve?
Answer: FLSA classification monitoring and overtime liability assessment
Segmenting pay by FLSA classification helps ensure non-exempt employees are properly receiving overtime and identifies misclassification risks.
A company's payroll burden rate is calculated as total employer costs (taxes + benefits) divided by gross wages. If gross wages are $500,000 and employer costs are $125,000, what is the burden rate?
Answer: 25%
Burden rate = $125,000 / $500,000 = 0.25, or 25%, meaning every dollar of wages costs the employer an additional $0.25.
Which of the following would be classified as a non-cash payroll-related expense on a financial statement?
Answer: Stock-based compensation expense
Stock-based compensation is a non-cash expense recognized on financial statements without a corresponding cash outflow at the time of recognition.