Chapter 14 - Accounting for Payroll-Related Liabilities

Question 1

what six major control features can a cpu use to safeguard payroll?

Answer 1

1) segregation of payroll procedure
2) only one person should be able to add/delete labor force
3) proper procedure
4) using imprest payroll account
5) payroll sheets and paychecks should be independently checked
6) unclaimed checks should be returned immediately to the controller or manager

Question 2

what basic items should included in a payroll master file?

Answer 2

employee’s name, address, SSN, wage rates, and payroll deduction information

Question 3

what is imprest payroll account?

Answer 3

a payroll account for which a predetermined, fixed amount of funds are maintained or replenished as part of typical control procedures

Question 4

what is payroll journal?

Answer 4

a jornal containing a record of each payroll check issued, along with the corresponding cross pay and carious deductions for taxes, healthcare and so on.

Question 5

what is employee’s earning record?

Answer 5

an individual record kept for each employee during the calendar year that shows gross wages earned and amounts withheld and deducted. used at the end of the year to prepare IRS form W-2.