Asked by Scarlet Melliz on May 28, 2024
Verified
Why would a company use a separate payroll cash account?
A) Provides for better internal control
B) Ease of account reconciliation
C) Determine whether or not the employee has cashed their check
D) All of the above are correct.
Internal Control
Processes adopted by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.
Account Reconciliation
The process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement.
- Understand the significance and mechanisms of separate payroll cash accounts for enhanced internal control and reconciliation.
Verified Answer
JM
Jolene MaciasMay 28, 2024
Final Answer :
D
Explanation :
A separate payroll cash account helps in better internal control by segregating duties and transactions, makes account reconciliation easier by isolating payroll transactions, and allows for tracking of uncashed checks, thus serving all the mentioned purposes.
Learning Objectives
- Understand the significance and mechanisms of separate payroll cash accounts for enhanced internal control and reconciliation.