CHAPTER 10 – PAYROLL EXAM
PRACTICE
Part A – Multiple Choice
1. What is payroll?
A. The process of purchasing inventory
B. The business process of paying employees
C. The process of calculating sales
D. The process of preparing bank statements
2. How many weeks are there in a year according to the chapter?
A. 48
B. 50
C. 52
D. 54
3. Which of the following is a mandatory payroll deduction?
A. Medical insurance
B. Life insurance
C. CPP
D. Vacation pay
4. Net pay is calculated as:
A. Gross Pay + Deductions
B. Gross Pay − Deductions
C. Gross Pay × Deductions
D. Gross Pay ÷ Deductions
5. Which of the following is included in a payroll system?
A. Social Insurance Number
B. Regular and overtime hours
C. Pay rates
D. All of the above
Part B – Short Answer
6. List the five steps involved in processing payroll.
Answer: 1) Collect employee time and payroll information. 2) Calculate gross pay. 3) Calculate
deductions. 4) Calculate net pay. 5) Record payroll and pay/remit the amounts owed.
, 7. What is the difference between gross pay and net pay?
Answer: Gross pay is total earnings before deductions; net pay is the amount received after
deductions.
8. Name the three mandatory/compulsory deductions identified in the chapter.
Answer: Canada Pension Plan (CPP), Employment Insurance (EI), and income tax.
9. What is the difference between hourly payroll and piecework payroll?
Answer: Hourly payroll is based on hours worked multiplied by the hourly rate; piecework payroll is
based on the number of units produced multiplied by the rate per piece.
10. What is commission payroll?
Answer: Commission payroll is compensation based on a percentage of an employee’s sales.
11. What is salary payroll?
Answer: Salary payroll pays an employee a fixed amount for each pay period.
12. Explain the difference between time-and-a-half overtime and double-time overtime.
Answer: Time-and-a-half overtime is paid at 1.5 times the regular rate; double-time overtime is paid
at 2 times the regular rate.
Part C – Calculation Questions
13. Hourly Payroll
Maria earns $24 per hour and works 40 regular hours in one week.
Calculate her regular gross pay.
Answer: 40 hours × $24 = $960 regular gross pay.
14. Overtime
Ahmed earns $20 per hour. He works 46 hours in one week.
PRACTICE
Part A – Multiple Choice
1. What is payroll?
A. The process of purchasing inventory
B. The business process of paying employees
C. The process of calculating sales
D. The process of preparing bank statements
2. How many weeks are there in a year according to the chapter?
A. 48
B. 50
C. 52
D. 54
3. Which of the following is a mandatory payroll deduction?
A. Medical insurance
B. Life insurance
C. CPP
D. Vacation pay
4. Net pay is calculated as:
A. Gross Pay + Deductions
B. Gross Pay − Deductions
C. Gross Pay × Deductions
D. Gross Pay ÷ Deductions
5. Which of the following is included in a payroll system?
A. Social Insurance Number
B. Regular and overtime hours
C. Pay rates
D. All of the above
Part B – Short Answer
6. List the five steps involved in processing payroll.
Answer: 1) Collect employee time and payroll information. 2) Calculate gross pay. 3) Calculate
deductions. 4) Calculate net pay. 5) Record payroll and pay/remit the amounts owed.
, 7. What is the difference between gross pay and net pay?
Answer: Gross pay is total earnings before deductions; net pay is the amount received after
deductions.
8. Name the three mandatory/compulsory deductions identified in the chapter.
Answer: Canada Pension Plan (CPP), Employment Insurance (EI), and income tax.
9. What is the difference between hourly payroll and piecework payroll?
Answer: Hourly payroll is based on hours worked multiplied by the hourly rate; piecework payroll is
based on the number of units produced multiplied by the rate per piece.
10. What is commission payroll?
Answer: Commission payroll is compensation based on a percentage of an employee’s sales.
11. What is salary payroll?
Answer: Salary payroll pays an employee a fixed amount for each pay period.
12. Explain the difference between time-and-a-half overtime and double-time overtime.
Answer: Time-and-a-half overtime is paid at 1.5 times the regular rate; double-time overtime is paid
at 2 times the regular rate.
Part C – Calculation Questions
13. Hourly Payroll
Maria earns $24 per hour and works 40 regular hours in one week.
Calculate her regular gross pay.
Answer: 40 hours × $24 = $960 regular gross pay.
14. Overtime
Ahmed earns $20 per hour. He works 46 hours in one week.
