Certified Payroll Professional Practice Exam

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What is direct deposit?

A method where payroll checks are physically delivered

A method of payment where an employee receives cash in hand

A method of payment where an employee’s wages are electronically deposited into their bank account

Direct deposit refers specifically to a method of payment in which an employee’s wages are electronically transferred directly into their bank account. This approach provides convenience for employees, as they do not need to physically handle paper checks or visit a bank to deposit their earnings. Direct deposit also improves efficiency for employers, allowing for streamlined payroll processing and reducing the risk of lost or stolen checks.

The key characteristics of direct deposit include its electronic nature and the immediate availability of funds to the employee upon payment, which enhances both security and accessibility. Since it eliminates the physical need for checks or cash, employees can receive their wages faster and manage their finances more effectively.

Certified Payroll Professional Practice Exam

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