CERTIFIED PAYROLL PROFESSIONAL (CPP) 2026 EXAM PRACTICE
QUESTIONS WITH ACCURATE SOLUTIONS
1) The definition of an expense is which of the following?
A) Debts of a business that have yet to be paid
B) Resources acquired by a business that are consumed by the
business
C) Purchase of goods or services consumed during the accounting
period -- Answer ✔✔ C
2) The definition of a liability is:
A) Debts of a business that have yet to be paid
B) Resources acquired by a business that are consumed by the
business consumed by the business
C) Purchase of goods or services consumed during the accounting
period -- Answer ✔✔ A
3) The definition of equity is:
A) Debts of a business that have yet to be paid
B) Resources acquired by a business that are consumed by the
business
C) Purchase of goods or services consumed during the accounting
period
D) Result of subtracting liabilities from assets -- Answer ✔✔ D
,4) For an expense that was accrued for last month what must an accounting
department do the next month?
A) Adjustment entry
B) Nothing
C) An accrual reversal
D) Debit cash, credit expense -- Answer ✔✔ C
5) What is the definition of an asset?
A) Debits of a business that have yet to be paid
B) Resources acquired by businesses that are consumed by the
business
C) Purchase of goods or services, or costs incurred on a one time or
short term basis
D) Result of subtracting liabilities from assets -- Answer ✔✔ B
6) What does it mean when two systems are interfaced?
A) Printers, modems, external drive
B) Data reside on a server
C) Powerful personal computers
D) Sharing data needed by both -- Answer ✔✔ D
7) What is not a disadvantage of a service bureau?
A) Possibly high variable costs
B) Reduction in processing delays
C) Responsibility for filing errors
D) Little time for change -- Answer ✔✔ B
8) What is an environment called where all computers are physically attached to
each other and data is transmitted at high speeds over short distances?
A) Network
B) Modem
C) LAN
D) WAN -- Answer ✔✔ C
,9) What is not an advantage of a service bureau?
A) New services can be added
B) Fewer research problems
C) Control over security
D) Low processing costs -- Answer ✔✔ C
10) What is not a disadvantage of an in-house microcomputer network?
A) Keep system up to date
B) Data sharing
C) Network manager needed
D) Initial installation cost -- Answer ✔✔ B
11) What is not an advantage of off the shelf software?
A) Small employers only
B) Low cost
C) Ease of use
D) Use it right away -- Answer ✔✔ A
12) What is not a disadvantage of vendor supplied software packages?
A) Improper fit
B) Specific needs may not be met
C) User group networking
D) Training -- Answer ✔✔ C
13) What is not a advantage of customized software?
A) Update responsibility
B) Increased flexibility
C) Control
D) Special needs -- Answer ✔✔ A
14) What is not part of selecting a computerized payroll system?
A) Analyze
B) Build a project team
C) RFP
, D) Putting controls into the process -- Answer ✔✔ D
15) Which of the following is not part of a system edit?
A) Report with negative net pay
B) Report with active employees with no pay
C) Report with union dues payable
D) Report with employees over 40 hours -- Answer ✔✔ C
16) What should not be a part of the system documentation?
A) Schedules
B) Adjustment and corrections entry
C) Reports
D) Company policies -- Answer ✔✔ D
17) Which of the following should be part of a disaster recovery plan?
A) Arrange office equipment rental
B) Keep backup files off premises
C) Communicate the plan
D) All the above -- Answer ✔✔ D
18) Which internal control method requires employees to show identification before
getting paid, also known as stopping phantom employees?
A) Rotating jobs
B) Physical payouts
C) System edits
D) Verifying -- Answer ✔✔ B
19) What is not part of the system security?
A) System access
B) Backing up data
C) Checking for adequate power
D) Secure files -- Answer ✔✔ C
QUESTIONS WITH ACCURATE SOLUTIONS
1) The definition of an expense is which of the following?
A) Debts of a business that have yet to be paid
B) Resources acquired by a business that are consumed by the
business
C) Purchase of goods or services consumed during the accounting
period -- Answer ✔✔ C
2) The definition of a liability is:
A) Debts of a business that have yet to be paid
B) Resources acquired by a business that are consumed by the
business consumed by the business
C) Purchase of goods or services consumed during the accounting
period -- Answer ✔✔ A
3) The definition of equity is:
A) Debts of a business that have yet to be paid
B) Resources acquired by a business that are consumed by the
business
C) Purchase of goods or services consumed during the accounting
period
D) Result of subtracting liabilities from assets -- Answer ✔✔ D
,4) For an expense that was accrued for last month what must an accounting
department do the next month?
A) Adjustment entry
B) Nothing
C) An accrual reversal
D) Debit cash, credit expense -- Answer ✔✔ C
5) What is the definition of an asset?
A) Debits of a business that have yet to be paid
B) Resources acquired by businesses that are consumed by the
business
C) Purchase of goods or services, or costs incurred on a one time or
short term basis
D) Result of subtracting liabilities from assets -- Answer ✔✔ B
6) What does it mean when two systems are interfaced?
A) Printers, modems, external drive
B) Data reside on a server
C) Powerful personal computers
D) Sharing data needed by both -- Answer ✔✔ D
7) What is not a disadvantage of a service bureau?
A) Possibly high variable costs
B) Reduction in processing delays
C) Responsibility for filing errors
D) Little time for change -- Answer ✔✔ B
8) What is an environment called where all computers are physically attached to
each other and data is transmitted at high speeds over short distances?
A) Network
B) Modem
C) LAN
D) WAN -- Answer ✔✔ C
,9) What is not an advantage of a service bureau?
A) New services can be added
B) Fewer research problems
C) Control over security
D) Low processing costs -- Answer ✔✔ C
10) What is not a disadvantage of an in-house microcomputer network?
A) Keep system up to date
B) Data sharing
C) Network manager needed
D) Initial installation cost -- Answer ✔✔ B
11) What is not an advantage of off the shelf software?
A) Small employers only
B) Low cost
C) Ease of use
D) Use it right away -- Answer ✔✔ A
12) What is not a disadvantage of vendor supplied software packages?
A) Improper fit
B) Specific needs may not be met
C) User group networking
D) Training -- Answer ✔✔ C
13) What is not a advantage of customized software?
A) Update responsibility
B) Increased flexibility
C) Control
D) Special needs -- Answer ✔✔ A
14) What is not part of selecting a computerized payroll system?
A) Analyze
B) Build a project team
C) RFP
, D) Putting controls into the process -- Answer ✔✔ D
15) Which of the following is not part of a system edit?
A) Report with negative net pay
B) Report with active employees with no pay
C) Report with union dues payable
D) Report with employees over 40 hours -- Answer ✔✔ C
16) What should not be a part of the system documentation?
A) Schedules
B) Adjustment and corrections entry
C) Reports
D) Company policies -- Answer ✔✔ D
17) Which of the following should be part of a disaster recovery plan?
A) Arrange office equipment rental
B) Keep backup files off premises
C) Communicate the plan
D) All the above -- Answer ✔✔ D
18) Which internal control method requires employees to show identification before
getting paid, also known as stopping phantom employees?
A) Rotating jobs
B) Physical payouts
C) System edits
D) Verifying -- Answer ✔✔ B
19) What is not part of the system security?
A) System access
B) Backing up data
C) Checking for adequate power
D) Secure files -- Answer ✔✔ C
