PAYROLL ADMINISTRATION EXAMINATION QUESTIONS
AND CORRECT ANSWER WITH EXPLANATION GRADED
A+ STUDY GUIDE SOUTHERN NEW HAMPSHIRE
UNIVERSITY
1. Payroll administration refers to:
A. Hiring employees
B. Managing employee salary payments and deductions
C. Training employees
D. Marketing products
Answer: B
It involves processing employee compensation.
2. The main purpose of payroll is to:
A. Delay payments
B. Ensure employees are paid correctly and on time
C. Reduce employees
D. Increase taxes
Answer: B
Payroll ensures accurate and timely payment.
3. Gross salary means:
A. Salary after deductions
B. Total earnings before deductions
C. Only allowances
D. Net take-home pay
Answer: B
Gross pay is total earnings.
4. Net salary is:
,A. Total earnings before deductions
B. Salary after deductions
C. Bonus only
D. Tax only
Answer: B
Net pay is take-home salary.
5. Payroll deductions include:
A. Bonuses
B. Taxes and insurance
C. Promotions
D. Training costs only
Answer: B
Deductions reduce gross pay.
6. PAYE stands for:
A. Pay As You Earn
B. Pay And Earn Extra
C. Payroll Allocation Yearly Expense
D. Payment Annual Yield Estimate
Answer: A
PAYE is income tax deduction.
7. Payroll processing cycle is:
A. Once in a lifetime
B. Monthly or periodic salary calculation
C. Random process
D. Recruitment process
Answer: B
Payroll is done regularly.
8. Overtime pay is:
, A. Reduced salary
B. Extra pay for extra working hours
C. Bonus deduction
D. Tax payment
Answer: B
It rewards extra work.
9. Allowances are:
A. Salary deductions
B. Extra benefits added to salary
C. Taxes
D. Penalties
Answer: B
They increase total pay.
10. Payroll system is used to:
A. Fire employees
B. Manage salary calculations
C. Train staff
D. Recruit workers
Answer: B
It processes salaries.
11. Payroll accuracy is important because:
A. It creates confusion
B. It ensures correct employee payment
C. It delays salaries
D. It increases taxes
Answer: B
Accuracy ensures fairness.
12. Statutory deductions are:
AND CORRECT ANSWER WITH EXPLANATION GRADED
A+ STUDY GUIDE SOUTHERN NEW HAMPSHIRE
UNIVERSITY
1. Payroll administration refers to:
A. Hiring employees
B. Managing employee salary payments and deductions
C. Training employees
D. Marketing products
Answer: B
It involves processing employee compensation.
2. The main purpose of payroll is to:
A. Delay payments
B. Ensure employees are paid correctly and on time
C. Reduce employees
D. Increase taxes
Answer: B
Payroll ensures accurate and timely payment.
3. Gross salary means:
A. Salary after deductions
B. Total earnings before deductions
C. Only allowances
D. Net take-home pay
Answer: B
Gross pay is total earnings.
4. Net salary is:
,A. Total earnings before deductions
B. Salary after deductions
C. Bonus only
D. Tax only
Answer: B
Net pay is take-home salary.
5. Payroll deductions include:
A. Bonuses
B. Taxes and insurance
C. Promotions
D. Training costs only
Answer: B
Deductions reduce gross pay.
6. PAYE stands for:
A. Pay As You Earn
B. Pay And Earn Extra
C. Payroll Allocation Yearly Expense
D. Payment Annual Yield Estimate
Answer: A
PAYE is income tax deduction.
7. Payroll processing cycle is:
A. Once in a lifetime
B. Monthly or periodic salary calculation
C. Random process
D. Recruitment process
Answer: B
Payroll is done regularly.
8. Overtime pay is:
, A. Reduced salary
B. Extra pay for extra working hours
C. Bonus deduction
D. Tax payment
Answer: B
It rewards extra work.
9. Allowances are:
A. Salary deductions
B. Extra benefits added to salary
C. Taxes
D. Penalties
Answer: B
They increase total pay.
10. Payroll system is used to:
A. Fire employees
B. Manage salary calculations
C. Train staff
D. Recruit workers
Answer: B
It processes salaries.
11. Payroll accuracy is important because:
A. It creates confusion
B. It ensures correct employee payment
C. It delays salaries
D. It increases taxes
Answer: B
Accuracy ensures fairness.
12. Statutory deductions are:
