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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Firms with a large number of employees generally use which of the following for disbursing payroll to employees?

  1. a. Payroll bank account
  2. b. General bank account
  3. c. Credit card account
  4. d. Accounts Receivable
  5. e. Accounts Payable

To determine

State the manner by which the firm with large number of employees disburse payroll to employees.

Explanation

Payroll:

Payroll refers to the total amount that is required to be paid by the company to its employees during a week, month or other period. It is the financial record of the wages and bonus, net pay, salary and deductions of a company’s employees.

Justification for the incorrect answer:

Option b:

When there are a large number of employees, the firm will open a special payroll bank account with its bank and not general bank account because it does not help in avoiding the overload of the company’s regular bank account with numerous payroll checks and it makes easier for the bank to reconcile their bank statement.

Option c:

When there are a large number of employees, the firm will open a special payroll bank account with its bank and not credit card account because it does not help in avoiding the overload of the company’s regular bank account with numerous payroll checks and it makes easier for the bank to reconcile their bank statement.

Option d:

When there are a large number of employees, the firm will open a special payroll bank account with its bank and not accounts receivable because it does not help in avoiding the overload of the company’s regular bank account with numerous payroll checks and it makes easier for the bank to reconcile their bank statement...

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