CPS Financial Analysis & Reporting 3

Question 1

Which of the following best describes a payroll cost center analysis?

Accepted Answer

A breakdown of payroll expenses attributed to specific departments or business units

Answer

Cost center analysis allocates payroll costs to specific organizational units to help management understand labor spending by department.

Question 2

A company pays employees twice a month (semi-monthly). How many payroll accrual entries would typically be needed in a fiscal year?

Accepted Answer

24

Answer

Semi-monthly payroll results in 24 pay periods per year (2 per month × 12 months), requiring 24 payroll entries.

Question 3

The purpose of a payroll to Form 941 reconciliation is to ensure that:

Accepted Answer

Total wages and taxes reported on 941s match the payroll register for the year

Answer

Reconciling payroll to Form 941 verifies that quarterly tax reports accurately reflect wages paid and taxes withheld as recorded in payroll data.

Question 4

An employer's FUTA tax liability is reduced by the credit for state unemployment taxes paid. What is the maximum FUTA credit allowed?

Accepted Answer

5.4%

Answer

Employers can receive a maximum FUTA credit of 5.4% for timely paid state unemployment taxes, reducing the effective FUTA rate to 0.6%.

Question 5

When analyzing overtime costs, which formula correctly expresses the overtime premium as a percentage of regular pay?

Accepted Answer

[(OT rate − Regular rate) / Regular rate] × 100

Answer

The overtime premium percentage compares the extra cost above regular rate to the regular rate, showing how much more OT labor costs.

(CPS) Certified Payroll Specialist Practice Test