PART 4 Flashcards
Differences between Accounting for labor and Material
- Different employees require different procedures, from piece meal to hourly to
commissioned ones. Unlike in Materials, purchases are different but they apply same
procedures. - Payroll Procedures occur in a weekly, daily, bimonthly or in a commissioned basis.
Materials on the hand, depends on their level of activity. - Payroll requires special controls for some labor activities are usually not easily seen
compared to materials
Department that prepares and submits Personnel action forms in preparing Payroll function
Personnel Department
are documents which the employee’s Pay rate, Deductions, Job
Classification and others.
Personnel action forms
department that prepares Time cards and Job Tickets to record employee performance
Production Department
It keep track of the employees’ hours working on the job. The card is punched through a special timekeeping device that records their time of going in and out of the
establishment.
Time Cards
It keep track of the employee hours spent on the job; it also indicates how
many they have made on each product job.
Job Tickets
These items are collected to determine the costs and the total charges are
summarized and posted to appropriate Ledger accounts.
TIME CARDS AND JOB TICKETS
Payroll Preparation wherein the Payroll Department collects the data from the personnel department (to determine
salary rate and also to determine the employee’s tax level) and from the Production department
(to determine total hours/days worked) and performs the following:
- Prepares the payroll register showing Gross Pay, Withholding taxes and the Net Pay.
- Entering the information to employee records.
- Prepares the employee paychecks (salary or wage).
- Sending the Pay slips to appropriate distribution Department.
- And Finally, Filing the data. (Forms, copy of Payroll register)
It was given to employees, which is commonly done by a person who’s
uninvolved in payroll authorization or in preparation
Paychecks
Keme lang: under paycheck distribution
The one who distributes the paycheck called?
This is done to
eliminate fraud of giving paychecks to non-existent/ ghost employees.
Paymaster
The department prepares a single check for the total amount of the payroll and deposits
it in the _______.
Payroll Imprest Account
Funds must be transferred from the general cash account to
this Imprest account before the paychecks can be cashed. The clerk sends a copy of the check
along with the disbursement voucher and the payroll register to the AP department, where they
are filed (not shown). Finally, a journal voucher is prepared and sent to the general ledger
function
Cash Disbursement
It’s function to receives the labor distribution summary from cost
accounting, the disbursement voucher from AP, and the journal voucher from cash
disbursements.
General Ledger
The audit trail for payroll includes the following documents:
A. Time cards, job tickets, and disbursement vouchers.
B. Journal information, which comes from the labor distribution summary and
the payroll register.
C. Subsidiary ledger accounts, which contain the employee records and various
expense accounts.
D. The general ledger accounts, specifically: payroll control, cash, and the payroll clearing
(imprest) account.
Why Control over access to all journals, ledgers, and the source documents in the payroll
system are important?
As it is in all Expenditure Cycle Systems.
The following are examples of independent verification controls in the payroll
system:
Verification of time
Paymaster
Accounts Payable
General Ledger
The labor distribution summary and the payroll disbursement voucher.
This department receives hard copy of the personnel action forms, job
tickets, and time cards, which it converts to digital files.
The Data Processing Department
These programs perform the
check writing, detailed record keeping, and general ledger functions
Batch Computer Programs.
This system is usually for entities with simple business structure.
Batch System
This system is used for Complex Businesses.
HRM (HUMAN RESOURCE MANAGEMENT) system
It captures and processes a wide range of personnel - related data,
including employee benefits, labor resource planning, employee relations, employee skills, and
personnel actions (pay rates, deductions, and so on), as well as payroll.
HRM system
It needs to provide real-time access to personnel files for purposes of direct inquiries and recording
changes in employee status as they occur.
HRM SYSTEMS
The Fixed Asset System involves 3 phases namely;
Acquisition, Maintenance and Disposal.
he will evaluate if the entity needs to purchase an asset for new
installations or for replacement; which the asset value depends on the limit set by the
management.
Department Manager
