Fundamental Payroll Certification Fundamental Payroll Systems and Administration 3

Question 1

Which payroll processing method requires the employer to manage all payroll functions internally without outside assistance?

Accepted Answer

In-house (manual) payroll

Answer

In-house or manual payroll means the employer handles all calculations, tax filings, and record-keeping using internal staff and systems.

Question 2

A company uses a payroll service bureau. Who is ultimately responsible for ensuring payroll taxes are filed correctly and on time?

Accepted Answer

The employer

Answer

Even when using a service bureau, the employer retains legal responsibility for accurate and timely payroll tax compliance.

Question 3

What does 'gross-to-net' processing refer to in a payroll system?

Accepted Answer

Calculating an employee's net pay by subtracting taxes and deductions from gross earnings

Answer

Gross-to-net processing starts with total earnings and systematically subtracts all required taxes and voluntary deductions to arrive at net pay.

Question 4

Which control helps prevent a single payroll employee from both authorizing payroll and disbursing funds?

Accepted Answer

Dual authorization or segregation of duties

Answer

Segregation of duties requires that different individuals authorize payroll and actually release the funds, reducing the risk of fraud.

Question 5

An employee is classified as exempt from overtime. Under the FLSA, which of the following is NOT a requirement for the executive exemption?

Accepted Answer

Must be paid on an hourly basis

Answer

The FLSA executive exemption requires a salary basis of at least the threshold amount, not hourly pay; hourly payment typically disqualifies the exemption.

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Practice Test

Fundamental Payroll Certification Fundamental Payroll Systems and Administration 3