Accounting Fundamentals Payroll Exam
with Questions and Correct Answers
2025
What does payroll involve? - CORRECT ANSWERS a company's recording of its
employee's compensation such as: wages, salaries, bonuses, commissions, withholding
of payroll taxes (income taxes, social security taxes, medicare taxes), withholdings of
employees (health insurance premiums, contributions to savings plans), employer's
expense for taxes, and employer's expense for benefits (health insurance, dental
insurance, vision insurance, savings plan contributions)
Is payroll an asset or liability? - CORRECT ANSWERS liability
What is used in payroll accounting? - CORRECT ANSWERS matching principle
What does the matching principle require? - CORRECT ANSWERS a company to
match expenses to the accounting period in which the related revenues are reported (if
there is not a direct connection between revenues and expenses, the expense should
appear on the income statement for the accounting period in which is was incurred -
expenses often occur in a different accounting period in which they are paid)
Kristen is hired by ABC Company to work a total of five days December 26 through
December 30. On December 30, Kristen turns in her time card and ABC Company gives
her a check on the next scheduled payday, January 15th. (matching principle) -
CORRECT ANSWERS the paycheck was issued in January, the matching principle
requires the expense to be reported in December when the work was completed
what is a salary? - CORRECT ANSWERS a regular but fixed amount paid to an
employee for working (before taxes and deductions / gross amount)
how often are salaries paid? - CORRECT ANSWERS usually semi-monthly (on the 15th
and last days of the month) or bi-weekly (every other Friday)
what is a salary typically referred to as? - CORRECT ANSWERS a yearly sum (ex:
$35,000 per year)
describe salaried employees - CORRECT ANSWERS they earn a specific annual
amount, so the gross pay per pay period is typically the same recurring amount
Brenda makes $72,000 per year and her salary is paid semi-monthly. What is her gross
pay for each of the 24 pay periods? - CORRECT ANSWERS $3,000
, who typically uses time cards? why? - CORRECT ANSWERS wage earning employees
to record their hours worked
what is a time card? - CORRECT ANSWERS a document that records the amount of
hours worked in a specific time period
what does a time card include? - CORRECT ANSWERS a starting time/date and ending
time/date
what are wages? - CORRECT ANSWERS regular payments to an employee made by
an employer
do wages fluctuate? - CORRECT ANSWERS they can fluctuate based on the number
of hours or days an employee works
how often are wages typically paid? - CORRECT ANSWERS on an hourly or daily basis
such as $15 per hour or $200 per day
how are wages determined? - CORRECT ANSWERS by multiplying the employee's
hourly or daily rate by the number of hours or days worked (this figures the gross wage -
wage prior to any deductions)
Kristen's pay rate for the five days she worked for ABC Company is $25.50 per hour.
She worked seven hours on each day. What is her gross wage? - CORRECT
ANSWERS $892.50 (25.5*35)
Adam's pay rate is $250 per day of work at ABC Company. He worked four days in
March and 7 days in April. What is the gross wage for March and April? - CORRECT
ANSWERS March: $1,000 (250*4), April: $1,750 (250*7)
what is overtime? - CORRECT ANSWERS the time worked in excess of 40 hours per
week
what is an overtime premium? - CORRECT ANSWERS the "half" potion of "time-and-
one-half" overtime pay
Tori is expected to work 40 hours per week at $15 per hour, but she is required to work
45 hours one week. What is her gross wage? - CORRECT ANSWERS $712.50
(40*15=600, 5*22.5=112.5, 600+112.5=712.5)
what is an employee earnings record? - CORRECT ANSWERS a record that displays
the history of an employee's payroll
what does an employee earnings record provide? - CORRECT ANSWERS year-to-date
totals of all earnings, deductions, and withholdings
with Questions and Correct Answers
2025
What does payroll involve? - CORRECT ANSWERS a company's recording of its
employee's compensation such as: wages, salaries, bonuses, commissions, withholding
of payroll taxes (income taxes, social security taxes, medicare taxes), withholdings of
employees (health insurance premiums, contributions to savings plans), employer's
expense for taxes, and employer's expense for benefits (health insurance, dental
insurance, vision insurance, savings plan contributions)
Is payroll an asset or liability? - CORRECT ANSWERS liability
What is used in payroll accounting? - CORRECT ANSWERS matching principle
What does the matching principle require? - CORRECT ANSWERS a company to
match expenses to the accounting period in which the related revenues are reported (if
there is not a direct connection between revenues and expenses, the expense should
appear on the income statement for the accounting period in which is was incurred -
expenses often occur in a different accounting period in which they are paid)
Kristen is hired by ABC Company to work a total of five days December 26 through
December 30. On December 30, Kristen turns in her time card and ABC Company gives
her a check on the next scheduled payday, January 15th. (matching principle) -
CORRECT ANSWERS the paycheck was issued in January, the matching principle
requires the expense to be reported in December when the work was completed
what is a salary? - CORRECT ANSWERS a regular but fixed amount paid to an
employee for working (before taxes and deductions / gross amount)
how often are salaries paid? - CORRECT ANSWERS usually semi-monthly (on the 15th
and last days of the month) or bi-weekly (every other Friday)
what is a salary typically referred to as? - CORRECT ANSWERS a yearly sum (ex:
$35,000 per year)
describe salaried employees - CORRECT ANSWERS they earn a specific annual
amount, so the gross pay per pay period is typically the same recurring amount
Brenda makes $72,000 per year and her salary is paid semi-monthly. What is her gross
pay for each of the 24 pay periods? - CORRECT ANSWERS $3,000
, who typically uses time cards? why? - CORRECT ANSWERS wage earning employees
to record their hours worked
what is a time card? - CORRECT ANSWERS a document that records the amount of
hours worked in a specific time period
what does a time card include? - CORRECT ANSWERS a starting time/date and ending
time/date
what are wages? - CORRECT ANSWERS regular payments to an employee made by
an employer
do wages fluctuate? - CORRECT ANSWERS they can fluctuate based on the number
of hours or days an employee works
how often are wages typically paid? - CORRECT ANSWERS on an hourly or daily basis
such as $15 per hour or $200 per day
how are wages determined? - CORRECT ANSWERS by multiplying the employee's
hourly or daily rate by the number of hours or days worked (this figures the gross wage -
wage prior to any deductions)
Kristen's pay rate for the five days she worked for ABC Company is $25.50 per hour.
She worked seven hours on each day. What is her gross wage? - CORRECT
ANSWERS $892.50 (25.5*35)
Adam's pay rate is $250 per day of work at ABC Company. He worked four days in
March and 7 days in April. What is the gross wage for March and April? - CORRECT
ANSWERS March: $1,000 (250*4), April: $1,750 (250*7)
what is overtime? - CORRECT ANSWERS the time worked in excess of 40 hours per
week
what is an overtime premium? - CORRECT ANSWERS the "half" potion of "time-and-
one-half" overtime pay
Tori is expected to work 40 hours per week at $15 per hour, but she is required to work
45 hours one week. What is her gross wage? - CORRECT ANSWERS $712.50
(40*15=600, 5*22.5=112.5, 600+112.5=712.5)
what is an employee earnings record? - CORRECT ANSWERS a record that displays
the history of an employee's payroll
what does an employee earnings record provide? - CORRECT ANSWERS year-to-date
totals of all earnings, deductions, and withholdings
