MPC - Payroll

1.
Which documents are used by payroll department in identifying the employees

authorized to receive paychecks?
a. Personnel action forms

b. Job cost tickets
c. Payroll bank account number of employees
d. Time cards
e. Employee resume
2. Which department is responsible for updating changes in the employee’s status

for withholding income tax purposes?
a. Human resource department

b. Accounts payable department
c. General ledger department
d. Payroll department
e. Cost accounting department
3. For proper internal controls, who should approve the payment for payroll of
employees?
a. Human resource department

b. General ledger department
c. Accounts payable department
d. Payroll department
e. Cash disbursement department
4. What is/are the benefits of a real-time payroll system? Select the best answer.
Benefit 1: Reductions in the use of paper and ink.
Benefit 2: Shorten, if not totally eliminated, lag time between occurrence of
payroll event and recording those events.
Benefit 3: Lessen clerical labor.
a. Neither benefit 1 nor benefit 2 nor benefit
b. Benefit 1 and 2 only
c. Benefit 1 only
d. Benefit 2 only
e. Benefit 1, 2, and 3.
5. An employee payroll record provides information about the payroll of an

employee for a particular payroll period.
a. True
b. False
6. In computer-based payroll system, the usual primary key of attendance file or

timesheet file is the employee number.
a. True
b. False
7. When payment of regular payroll of employees are done via electronic fund
transfer from the bank account of the company to the payroll bank account of
employees, there is no need for a paymaster.
a. True
b. False
8. The paymaster should verify the accuracy of timecards before signing and
sending those timecards to the payroll department.
a. True
b. False
9. Which of the following features is LEAST likely to be considered when looking

at the security of a new payroll system?
a. regular data back-up and storage

b. protection against computer viruses
c. limited system access
d. system edits
10. Company deadlines for payroll data input documents are essential for:
a. timely processing of the payroll

b. accurate entry of data
c. guaranteeing that all information is processed
d. adequate auditing purposes
11. The BEST reason for tracking pay-related problem statistics is to enable Payroll
to:
a. identify root causes and take actions to prevent similar recurrences

b. apologize to clients in a more professional manner
c. direct problems to those who caused the problem
d. justify more resources to handle more problems
12. Transactions are recorded in chronological order into books of original entry
called:
a. registers
b. vouchers
c. invoices
d. journals
13. The KEY advantage of using an automated time and attendance system is that
it:
a. identifies phantom employees

b. reduces errors
c. interfaces with the payroll system
d. frees supervisors from having to review hours
14. As part of the implementation of a new payroll system, all transactions from the
most recent actual payroll are processed in the new system prior to using the
system to run payrolls. This is an example of what type of testing?
a. compliance
b. back-up
c. ongoing
d. parallel
15. To exhibit good customer service skills, payroll staff must understand and be
able to explain:
a. payroll forms
b. benefits enrollment techniques
c. systems design decisions
d. strategic departmental direction
16. All of the following data elements are required to be maintained in the
employee Masterfile EXCEPT:
a. Tax identification number

b. birth date
c. marital status
d. hourly rate of pay
17. Upward communication involves:
a. dissemination of management decisions to the staff

b. interactions between you and your manager
c. passing information to management
d. conducting quality circle meetings
18. Calculate the employee's gross pay based on the following

data:
Rate of pay per hour: 80.00
Working hours: 10:00 pm to 7:00 am
Work days in a week: 5
a. 14,080.00
b. 15,360.00
c. 15,840.00
d. 17,280.00
19. For how many years must the employee’s 201 be kept?
a. at least two (2) years, with a maximum retention period of ten (10) years
b. at least three (3) years, with a maximum retention period of ten (10) years
c. at least four (4) years, with a maximum retention period of ten (10) years
d. at least five (5) years, with a maximum retention period of ten (10) years
20. Which of the following factors provides system security?
a. access level authorizations

b. shared passwords
c. conducting “physical payouts”
d. segregation of duties
21. What is the payroll department manager responsible for in a company with
strong internal controls?
a. assuring segregation of duties in the department

b. developing company policy
c. initiating payroll transactions
d. writing the internal audit transaction test plan
22. The process of balancing multiple time sheets within a specified pay period
utilizes a procedure known as:
a. batch totaling
b. exception reporting
c. system documentation
d. reconciliation
23. A procedure to have a time record signed by an employee indicates:

a. authorization for payment
b. confirmation of total hours
c. hours cannot be challenged
d. time spent at the establishment
24. To build morale and motivate staff, a manager must:
a. give good reviews and raises

b. reward “stars” and promote competition within each team
c. delegate accountability to staff members
d. be sincere and specific with praise
25. Which of the following items represents an input interface to the payroll system?
a. general ledger
b. time and attendance
c. benefit payments
d. material usage records
26. In a customer service situation, Payroll should:
a. assure the caller everything is okay, even when it is not

b. get in the last word
c. avoid addressing stressful issues
d. remain assertive and stay focused
27. A payroll department manager should assure:
a. an independent mission statement

b. appropriate training and equipment resources for staff members
c. immediate enactment of employee suggestions
d. top payment of staff
28. Which of the following practices is a strong internal control procedure?
a. Have the payroll bank account reconciled in the payroll department

b. Have the payroll manager distribute paychecks
c. Place payroll checks under the personal control of the payroll manager.
d. Have a person other than the person who requested and authorized
the payments prepare the payroll checks.
29. How are salaries reflected on the income statement?

a. income
b. assets
c. accruals
d. expenses
30. The KEY difference between user guides and payroll policies and procedures is:
a. User guides focus on tasks associated with automated tools.

b. Payroll policies and procedures set company policies and standards.
c. User guides help payroll personnel interpret company policy.
d. Payroll policies and procedures permit human resources to design new
compensation and benefits programs.
31. What is the effect of failing to record salaries that are earned but not paid at
the end of an accounting period?
a. understatement of expenses for the period

b. overstatement of expenses for the period
c. understatement of assets for the period
d. overstatement of liabilities for the period
32. One employment data element in the Masterfile is:
a. hourly rate of pay

b. marital status
c. birthdate
d. occupation
33. The methods to manage Payroll includes,
I. Doing it yourself by hand

II. Using employee payroll software
III. Outsourcing payroll
IV. Assisted payroll
a. I & II
b. I & III
c. I, II & III
d. I, II, III & IV
34. Functions involved in Payroll does not includes:
a. Balancing and reconciling payroll data

b. Calculating reimbursements, bonuses, overtime and holiday pay
c. Edits existing employee files.
d. All of the above
35. The total amount you earn before deductions is subtracted is called ________
pay.
a. Salary
b. Income
c. Net
d. Gross
36. The accountant of TED Company deducts the following from the employee’s
gross earnings EXCEPT:
a. Pagibig Fund
b. BIR withholding tax
c. Loans
d. Bonus
e.
37. The TRAIN Law has already been implemented by the Philippine government
and it exempts the minimum wage earners from withholding tax. Because of that,
Anna’s total deduction is reduced to Php1239. How much is her net earnings if
she works 22 days in a month at a daily wage of Php 537?
38. Roshan earns a monthly salary of Php 18500. What was her monthly net pay if
she paid Php 100 for Pag-ibig fund, Php 486.55 for SSS, and Php 508.75 for
PhilHealth?
39. Gary earns Php 13500 as a regular clerk. He also works as part-time service
crew in a fast-food restaurant that gives Php 78 per hour. If he works for 80 hours
in his part-time job for a month, how much will be his gross earnings?
40. Mia has a total deduction of Php 4389 for June. If her net earnings is Php 21324,
how much is her gross earnings in a month?
Foritem numbers 9 and 10, refer to the given fact below.
Chadhas the following deductions: x
Withholding tax = Php 2675 SSS= Php 971
Philhealth= Php 736 Pagibig= Php 100
41. What is the total amount of deductions if his gross earnings is Php 26754?
42. How much is his net earnings?
Essay:
How do you handle Payroll discrepancies or errors?

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1.

Which documents are used by payroll department in identifying the employees

a. Personnel action forms

2. Which department is responsible for updating changes in the employee’s status

a. Human resource department

a. Human resource department

5. An employee payroll record provides information about the payroll of an

6. In computer-based payroll system, the usual primary key of attendance file or

9. Which of the following features is LEAST likely to be considered when looking

a. regular data back-up and storage

a. timely processing of the payroll

a. identify root causes and take actions to prevent similar recurrences

a. identifies phantom employees

a. Tax identification number

a. dissemination of management decisions to the staff

18. Calculate the employee's gross pay based on the following

20. Which of the following factors provides system security?

a. access level authorizations

a. assuring segregation of duties in the department

23. A procedure to have a time record signed by an employee indicates:

24. To build morale and motivate staff, a manager must:

a. give good reviews and raises

26. In a customer service situation, Payroll should:

a. assure the caller everything is okay, even when it is not

27. A payroll department manager should assure:

a. an independent mission statement

28. Which of the following practices is a strong internal control procedure?

a. Have the payroll bank account reconciled in the payroll department

29. How are salaries reflected on the income statement?

a. User guides focus on tasks associated with automated tools.

a. understatement of expenses for the period

32. One employment data element in the Masterfile is:

a. hourly rate of pay

33. The methods to manage Payroll includes,

I. Doing it yourself by hand

34. Functions involved in Payroll does not includes:

a. Balancing and reconciling payroll data

Foritem numbers 9 and 10, refer to the given fact below.

Chadhas the following deductions: x

Withholding tax = Php 2675 SSS= Php 971

Philhealth= Php 736 Pagibig= Php 100

42. How much is his net earnings?

How do you handle Payroll discrepancies or errors?

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