Future Business Leaders of America (FBLA) Accounting Practice Test

Which of the following best describes payroll?

1. A record of a company's assets

2. A list of a business's employees and the payment due to each

3. The total income of a business

4. The expenses incurred by a business

The correct answer is: A list of a business's employees and the payment due to each

The best description of payroll is a list of a business’s employees and the payment due to each. Payroll encompasses not only the wages or salaries that employees earn but also includes deductions such as taxes, benefits, and other withholdings. This record is essential for both the business and the employees, as it ensures proper payment for work done and compliance with regulations. Additionally, payroll serves as a crucial part of a company’s financial management, affecting cash flow and financial reporting. Keeping accurate payroll records is vital for efficient business operations, helping to track labor costs and ensure that employees are compensated fairly and on time. The other options discuss different aspects of a business's financials: assets, total income, and expenses, which while important, do not specifically define what payroll is. Payroll is distinctly focused on employee compensation rather than broader financial metrics.