, CONTENTS
➢ Chapter 1: The Need for Payroll and Personnel Records
q q q q q q q q
➢ Chapter 2: Computing Wages and Salaries
q q q q q
➢ Chapter 3: Social Security Taxes
q q q q
➢ Chapter 4: Income Tax Withholding
q q q q
➢ Chapter 5: Unemployment Compensation Taxes
q q q q
➢ Chapter 6: Analyzing and Journalizing Payroll
q q q q q
➢ Chapter 7: Payroll Project
q q q
,Chapter 1 q
WhichqLaw?
1. K
2. H
3. B
4. F
5. I
6. J
7. A
8. D
9. G
10. C
11. E
12. L
WhichqPayrollqLaw?
1. D
2. A
3. F
4. C
5. G
6. J
7. B
8. I
9. E
10. H
What’sqEthical?
1. Answersqwillqvary.qSomeqconcernsqincludeqdataqprivacyqandqintegrityqinqtheqsoftwa
reqswitchover,qtaxqandqemployeeqpayqintegrityqonqtheqnewqsoftware,qandqemployeeqp
ayqmethods.
,2. Answersqwillqvary.qKarsynqcouldqchooseqtoqignoreqherqsororityqsister’sqrequest,qcl
aimingqConfidentiality.qSheqcouldqalsoqdiscontinueqactiveqparticipationqinqtheqsorori
ty.qInqanyqcase,qKarsynqmustqnotqconsentqtoqherqsororityqsister’sqrequestqforqconfide
ntialqinformation.
ConfidentialqRecords
Asqtheqpayrollqclerk,qyourqtaskqisqtoqprotectqtheqprivacyqandqconfidentialityqofqtheqinforma
tionqyouqmaintainqforqtheqcompany.qIfqaqstudentqgroup—
orqanyqpersonnelqasideqfromqtheqcompany’sqpayrollqemployeesqandqofficers—
wishesqtoqreviewqconfidentialqrecords,qyouqshouldqdenyqtheirqrequest.qIfqneeded,qyouqsho
uldqreferqtheqgroupqtoqyourqdepartment’sqmanagerqtoqdiscussqtheqmatterqinqmoreqdepth.q
TheqlawsqthatqapplyqtoqthisqsituationqareqtheqPrivacyqActqofq1974,qU.S.qDepartmentqofqHeal
thqandqHumanqServicesqPrivacyqActq09-40-0006,qCommon-
LawqPrivacyqAct,qComputerqFraudqandqAbuseqAct,qandqpotentiallyqHIPAA.
Largeqvs.qSmall
1. Largeqcompaniesqfaceqissuesqwithqmultipleqdepartments,qemployeeqaccessqt
oqonlineqpersonnelqportals,qemployeeqdataqsecurity,qandqtimekeepingqaccur
acy.
2. Forqsmallqcompanies,qpayrollqprocessingqwillqinvolveqfewerqemployeesqthanqfor
largerqcompanies.qSmallerqcompaniesqcouldqmaintainqtheirqpayrollqneedsqusin
q
gqcompanyqpersonnelqbecauseqofqtheqlowerqvolumeqofqtransactions.qLargerqco
, mpaniesqneedqtoqconsiderqtheirqavailableqtrainedqpayrollqaccountantsqandqothe
rqstaffqtoqdetermineqifqtheyqcanqreliablyqhandleqtheqvolumeqofqpayrollqneedsqinqa
qtimelyqandqaccurateqmanner.
WhatqIsqtheqDifference?
, a. Manualqpayrollqsystemsqinvolveqthequseqofqpaperqandqpencilqrecord-
keepingqorqaqspreadsheetqprogram,qsuchqasqMicrosoftqExcel.qThisqisqmostqappr
opriateqforqveryqsmallqfirms.
b. Computerizedqpayrollqsystemsqcanqbequsedqbyqanyqcompany,qregardlessqofqsize.qE
xamplesqofqcomputerizedqsystemsqincludeqQuickBooks,qSageq100,qandqMicrosoftq
Dynamicsq365qGP.qTheseqcomputerqpackagesqrangeqinqprice,qdependingqonqtheqc
ompanyqsizeqandqoperationalqscope.
c. Outsourcedqpayrollqinvolvesqtheqengagementqofqaqthirdqpartyqtoqmanageqaqc
ompany’sqpayrollqdata,qissueqemployeeqcompensation,qandqprepareqtaxqforms
.
d. Certifiedqpayrollqpertainsqtoqcompaniesqwithqemployeesqwhoqworkqonqfederalqgov
ernmentqcontracts.qCertifiedqpayrollqensuresqthatqaqcompanyqreportsqpayrollqexpe
ndituresqofqcontractuallyqallocatedqmoney.
ANSWERSqTOqEND-OF-
CHAPTERqMATERIALSqREVIEWqQUESTIONS
1. Whatqisqtheqpurposeqofqaqpayrollqsystem?
a. Provideqforqinternalqandqexternalqreportingqofqemployeeqwagesqandqassociate
dqtaxes,qpaymentqofqemployeeqcompensation,qandqmonitoringqofqbenefitsqtoq
employees.qItqalsoqservesqasqaqmeansqofqtrackingqlaborqcostsqthatqmanagersqus
eqforqdecision-making,qbudgeting,qandqplanning.
,2. Whatqareqtwoqdifferencesqbetweenqlarge-qandqsmall-companyqpayrollqpractices?
a. Smallqcompaniesqwouldqhaveqfewerqemployeesqandqreportingqrequirementsqa
ndqwouldqbeqlessqlikelyqtoqbeqrequiredqtoqhaveqautomatedqpayrollqsystems.
, b. Largeqcompaniesqhaveqmoreqemployeesqandqgreaterqdepartmentalization.qThi
sqincreaseqinqemployeesqleadsqtoqaqhigherqlevelqofqcomplexityqinqpayrollqaccou
nting,qdisbursements,qandqreporting.qLargerqcompaniesqmayqalsoqprovideqIntr
anetqportalsqforqemployeeqself-
serviceqoptions.qAdditionally,qlargerqcompaniesqmayqneedqadditionalqaccuracy
checks.
q
3. Whatqisqcertifiedqpayroll?qWhichqcompaniesqmustquseqit?
a. Certifiedqpayrollqisqaqreportingqrequirementqforqcompaniesqthatqworkqwith
qfederalqcontractsqthatqareqsubjectqtoqDavis-
Baconqwages.qOnlyqthoseqcompaniesqthatqhaveqtheseqtypesqofqemployeesq
wouldqbeqrequiredqtoqcompleteqaqcertifiedqpayroll.
4. Whyqmightqitqbeqaqgoodqideaqtoqletqemployeesqmanageqtheirqpayrollqrecords?qWhat
areqsomeqofqtheqpitfalls?
q
a. Anqadvantageqofqallowingqindividualsqtoqself-
manageqtheirqpayrollqrecordsqwouldqbeqtheqemployeeqwouldqbeqableqtoqans
werqsomeqsimpleqquestionsqonqtheirqownqwithoutqhavingqtoqcomeqtoqtheqpa
yrollqaccountantqforqanswers.qIfqemployeesqhaveqaccessqtoqtheirqpayrollqrecor
ds,qthereqwouldqbeqtheqneedqtoqallowqmultipleqaccessqpointsqtoqtheqconfiden
tialqinformation.qTheseqopenqchannelsqwouldqrequireqsecurityqsettingsqtoqens
ureqtheqrequirementsqofqconfidentialityqareqmaintained.
,5. Whatqareqtwoqwaysqaqpayrollqsystemqmayqprotectqaqcompanyqinqtheqeventqofqaqvis
itqfromqaqgovernmentqauditor?
Answersqmayqvary,qbutqshouldqcontain:
a. Theqestablishmentqandqmaintenanceqofqanqaccurateqpayrollqsystem.qTimelyq
andqaccuratelyqreportingqwagesqandqwithholdings.qAdherenceqtoqtheqlegalqf
rameworkqofqpayroll.
, 6. Whatqisqpayrollqoutsourcing?qWhenqmightqaqcompanyqconsiderqoutsourcingqitsqpayroll?
a. Payrollqoutsourcingqisqtheqprocessqofqcontractingqanotherqcompanyqforqtheqpre
paration,qreporting,qandqfilingqofqemployeeqpayroll.qCompaniesqmayqconsiderqt
hisqoptionqifqtheqcompanyqseesqaqbenefitqtoqtheqcompanyqthatqoutweighsqtheqc
ostqofqoutsourcing.
7. Whatqareqthreeqexamplesqofqfederalqlawsqthatqareqessentialqtoqensureqlegal,qf
airqhiringqpractices?
Answersqshouldqcontainqthreeqtheqfollowing:
a. AmericanqwithqDisabilitiesqAct
b. AgeqDiscriminationqinqEmploymentqAct
c. FairqLaborqStandardsqAct
d. CivilqRightsqAct
8. Whatqareqtheqmajorqtypesqofqpayrollqprocessingqmethods?
a. Manual
b. Computerized
c. Outsourced
d. Certified
9. Whatqareqtwoqlawsqgoverningqtheqtaxesqthatqemployersqmustqwithholdqfromqemployees?
a. 16thqAmendmentqofqtheqU.S.qConstitution
b. SocialqSecurityqInsuranceqAct
➢ Chapter 1: The Need for Payroll and Personnel Records
q q q q q q q q
➢ Chapter 2: Computing Wages and Salaries
q q q q q
➢ Chapter 3: Social Security Taxes
q q q q
➢ Chapter 4: Income Tax Withholding
q q q q
➢ Chapter 5: Unemployment Compensation Taxes
q q q q
➢ Chapter 6: Analyzing and Journalizing Payroll
q q q q q
➢ Chapter 7: Payroll Project
q q q
,Chapter 1 q
WhichqLaw?
1. K
2. H
3. B
4. F
5. I
6. J
7. A
8. D
9. G
10. C
11. E
12. L
WhichqPayrollqLaw?
1. D
2. A
3. F
4. C
5. G
6. J
7. B
8. I
9. E
10. H
What’sqEthical?
1. Answersqwillqvary.qSomeqconcernsqincludeqdataqprivacyqandqintegrityqinqtheqsoftwa
reqswitchover,qtaxqandqemployeeqpayqintegrityqonqtheqnewqsoftware,qandqemployeeqp
ayqmethods.
,2. Answersqwillqvary.qKarsynqcouldqchooseqtoqignoreqherqsororityqsister’sqrequest,qcl
aimingqConfidentiality.qSheqcouldqalsoqdiscontinueqactiveqparticipationqinqtheqsorori
ty.qInqanyqcase,qKarsynqmustqnotqconsentqtoqherqsororityqsister’sqrequestqforqconfide
ntialqinformation.
ConfidentialqRecords
Asqtheqpayrollqclerk,qyourqtaskqisqtoqprotectqtheqprivacyqandqconfidentialityqofqtheqinforma
tionqyouqmaintainqforqtheqcompany.qIfqaqstudentqgroup—
orqanyqpersonnelqasideqfromqtheqcompany’sqpayrollqemployeesqandqofficers—
wishesqtoqreviewqconfidentialqrecords,qyouqshouldqdenyqtheirqrequest.qIfqneeded,qyouqsho
uldqreferqtheqgroupqtoqyourqdepartment’sqmanagerqtoqdiscussqtheqmatterqinqmoreqdepth.q
TheqlawsqthatqapplyqtoqthisqsituationqareqtheqPrivacyqActqofq1974,qU.S.qDepartmentqofqHeal
thqandqHumanqServicesqPrivacyqActq09-40-0006,qCommon-
LawqPrivacyqAct,qComputerqFraudqandqAbuseqAct,qandqpotentiallyqHIPAA.
Largeqvs.qSmall
1. Largeqcompaniesqfaceqissuesqwithqmultipleqdepartments,qemployeeqaccessqt
oqonlineqpersonnelqportals,qemployeeqdataqsecurity,qandqtimekeepingqaccur
acy.
2. Forqsmallqcompanies,qpayrollqprocessingqwillqinvolveqfewerqemployeesqthanqfor
largerqcompanies.qSmallerqcompaniesqcouldqmaintainqtheirqpayrollqneedsqusin
q
gqcompanyqpersonnelqbecauseqofqtheqlowerqvolumeqofqtransactions.qLargerqco
, mpaniesqneedqtoqconsiderqtheirqavailableqtrainedqpayrollqaccountantsqandqothe
rqstaffqtoqdetermineqifqtheyqcanqreliablyqhandleqtheqvolumeqofqpayrollqneedsqinqa
qtimelyqandqaccurateqmanner.
WhatqIsqtheqDifference?
, a. Manualqpayrollqsystemsqinvolveqthequseqofqpaperqandqpencilqrecord-
keepingqorqaqspreadsheetqprogram,qsuchqasqMicrosoftqExcel.qThisqisqmostqappr
opriateqforqveryqsmallqfirms.
b. Computerizedqpayrollqsystemsqcanqbequsedqbyqanyqcompany,qregardlessqofqsize.qE
xamplesqofqcomputerizedqsystemsqincludeqQuickBooks,qSageq100,qandqMicrosoftq
Dynamicsq365qGP.qTheseqcomputerqpackagesqrangeqinqprice,qdependingqonqtheqc
ompanyqsizeqandqoperationalqscope.
c. Outsourcedqpayrollqinvolvesqtheqengagementqofqaqthirdqpartyqtoqmanageqaqc
ompany’sqpayrollqdata,qissueqemployeeqcompensation,qandqprepareqtaxqforms
.
d. Certifiedqpayrollqpertainsqtoqcompaniesqwithqemployeesqwhoqworkqonqfederalqgov
ernmentqcontracts.qCertifiedqpayrollqensuresqthatqaqcompanyqreportsqpayrollqexpe
ndituresqofqcontractuallyqallocatedqmoney.
ANSWERSqTOqEND-OF-
CHAPTERqMATERIALSqREVIEWqQUESTIONS
1. Whatqisqtheqpurposeqofqaqpayrollqsystem?
a. Provideqforqinternalqandqexternalqreportingqofqemployeeqwagesqandqassociate
dqtaxes,qpaymentqofqemployeeqcompensation,qandqmonitoringqofqbenefitsqtoq
employees.qItqalsoqservesqasqaqmeansqofqtrackingqlaborqcostsqthatqmanagersqus
eqforqdecision-making,qbudgeting,qandqplanning.
,2. Whatqareqtwoqdifferencesqbetweenqlarge-qandqsmall-companyqpayrollqpractices?
a. Smallqcompaniesqwouldqhaveqfewerqemployeesqandqreportingqrequirementsqa
ndqwouldqbeqlessqlikelyqtoqbeqrequiredqtoqhaveqautomatedqpayrollqsystems.
, b. Largeqcompaniesqhaveqmoreqemployeesqandqgreaterqdepartmentalization.qThi
sqincreaseqinqemployeesqleadsqtoqaqhigherqlevelqofqcomplexityqinqpayrollqaccou
nting,qdisbursements,qandqreporting.qLargerqcompaniesqmayqalsoqprovideqIntr
anetqportalsqforqemployeeqself-
serviceqoptions.qAdditionally,qlargerqcompaniesqmayqneedqadditionalqaccuracy
checks.
q
3. Whatqisqcertifiedqpayroll?qWhichqcompaniesqmustquseqit?
a. Certifiedqpayrollqisqaqreportingqrequirementqforqcompaniesqthatqworkqwith
qfederalqcontractsqthatqareqsubjectqtoqDavis-
Baconqwages.qOnlyqthoseqcompaniesqthatqhaveqtheseqtypesqofqemployeesq
wouldqbeqrequiredqtoqcompleteqaqcertifiedqpayroll.
4. Whyqmightqitqbeqaqgoodqideaqtoqletqemployeesqmanageqtheirqpayrollqrecords?qWhat
areqsomeqofqtheqpitfalls?
q
a. Anqadvantageqofqallowingqindividualsqtoqself-
manageqtheirqpayrollqrecordsqwouldqbeqtheqemployeeqwouldqbeqableqtoqans
werqsomeqsimpleqquestionsqonqtheirqownqwithoutqhavingqtoqcomeqtoqtheqpa
yrollqaccountantqforqanswers.qIfqemployeesqhaveqaccessqtoqtheirqpayrollqrecor
ds,qthereqwouldqbeqtheqneedqtoqallowqmultipleqaccessqpointsqtoqtheqconfiden
tialqinformation.qTheseqopenqchannelsqwouldqrequireqsecurityqsettingsqtoqens
ureqtheqrequirementsqofqconfidentialityqareqmaintained.
,5. Whatqareqtwoqwaysqaqpayrollqsystemqmayqprotectqaqcompanyqinqtheqeventqofqaqvis
itqfromqaqgovernmentqauditor?
Answersqmayqvary,qbutqshouldqcontain:
a. Theqestablishmentqandqmaintenanceqofqanqaccurateqpayrollqsystem.qTimelyq
andqaccuratelyqreportingqwagesqandqwithholdings.qAdherenceqtoqtheqlegalqf
rameworkqofqpayroll.
, 6. Whatqisqpayrollqoutsourcing?qWhenqmightqaqcompanyqconsiderqoutsourcingqitsqpayroll?
a. Payrollqoutsourcingqisqtheqprocessqofqcontractingqanotherqcompanyqforqtheqpre
paration,qreporting,qandqfilingqofqemployeeqpayroll.qCompaniesqmayqconsiderqt
hisqoptionqifqtheqcompanyqseesqaqbenefitqtoqtheqcompanyqthatqoutweighsqtheqc
ostqofqoutsourcing.
7. Whatqareqthreeqexamplesqofqfederalqlawsqthatqareqessentialqtoqensureqlegal,qf
airqhiringqpractices?
Answersqshouldqcontainqthreeqtheqfollowing:
a. AmericanqwithqDisabilitiesqAct
b. AgeqDiscriminationqinqEmploymentqAct
c. FairqLaborqStandardsqAct
d. CivilqRightsqAct
8. Whatqareqtheqmajorqtypesqofqpayrollqprocessingqmethods?
a. Manual
b. Computerized
c. Outsourced
d. Certified
9. Whatqareqtwoqlawsqgoverningqtheqtaxesqthatqemployersqmustqwithholdqfromqemployees?
a. 16thqAmendmentqofqtheqU.S.qConstitution
b. SocialqSecurityqInsuranceqAct
