CPS Financial Analysis & Reporting 2

Question 1

Which financial statement reports a company's payroll liabilities outstanding at the end of an accounting period?

Accepted Answer

Balance sheet

Answer

The balance sheet reports assets, liabilities, and equity as of a specific date, including accrued payroll liabilities.

Question 2

When reconciling payroll to the general ledger, a payroll specialist discovers a $500 variance. What is the FIRST step to resolve it?

Accepted Answer

Identify which pay period and account caused the discrepancy

Answer

The first step in reconciliation is to locate the source of the discrepancy by isolating the pay period and affected account.

Question 3

A company's total payroll cost includes gross wages of $200,000 and employer payroll taxes of $18,000. What is the employer payroll tax burden rate?

Accepted Answer

9%

Answer

Employer payroll tax burden rate = $18,000 / $200,000 = 9%.

Question 4

Which metric measures the total cost of maintaining the workforce, including wages, benefits, and employer taxes, as a percentage of revenue?

Accepted Answer

Labor cost ratio

Answer

The labor cost ratio expresses total workforce costs as a proportion of revenue, helping management assess workforce efficiency.

Question 5

For financial reporting purposes, accrued vacation pay that employees have earned but not yet used should be classified as:

Accepted Answer

A current liability

Answer

Accrued vacation pay is a current liability because it represents an obligation the company owes to employees typically within the next operating cycle.

(CPS) Certified Payroll Specialist Practice Test

(CPS) Certified Payroll Specialist Practice Test

CPS Financial Analysis & Reporting 2