FPC Chapter 6.4
What will be required in the accounting records when a repayment of overpaid wages occurs?
A. A journal entry to reverse the repayment and the record overstated wage expense
B. A general ledger adjustment to reverse the repayment and the record overstated wage
expense
C. A a general ledger adjustment to record the repayment and reverse the overstated wage
expense
D. A journal entry to record the repayment and reverse the overstated wage expense - ANS-D.
A journal entry to record the repayment and reverse the overstated wage expense
***For the accounting records, a journal entry will be required to record the repayment and
reverse the overstated wage expense.***
When checking the general ledger periodically, the following procedures are used EXCEPT:
A. reverse the payroll accrual entry.
B. compare general ledger accounts to the records for taxes withheld and paid.
C. ensure that employee paychecks are posted correctly.
D. verify the correct amount of taxes are withheld, deposited, and reported on time. - ANS-A.
reverse the payroll accrual entry.
***The general ledger should also be checked periodically to ensure that employee paychecks
are posted correctly and that the correct amount of taxes is withheld, deposited, and reported on
time. Any discrepancies should be reconciled by comparing general ledger accounts to the
records for taxes withheld and paid.***
During the current year, an employee repays wages paid in a prior year. The payroll department
should:
A. refund the federal income tax withheld to the employee.
B. adjust the repayments against current year wages.
C. advise the employee of the amount of repayments made during the year.
D. do nothing. - ANS-C. advise the employee of the amount of repayments made during the
year.
***Repayments made in the current year, but related to a prior year or years, require special tax
treatment by employees in some cases. Advise the employee of the total repayments made
during the current year and the amount (if any) related to prior years.***
The repayment of overpaid wages by an employee impacts:
What will be required in the accounting records when a repayment of overpaid wages occurs?
A. A journal entry to reverse the repayment and the record overstated wage expense
B. A general ledger adjustment to reverse the repayment and the record overstated wage
expense
C. A a general ledger adjustment to record the repayment and reverse the overstated wage
expense
D. A journal entry to record the repayment and reverse the overstated wage expense - ANS-D.
A journal entry to record the repayment and reverse the overstated wage expense
***For the accounting records, a journal entry will be required to record the repayment and
reverse the overstated wage expense.***
When checking the general ledger periodically, the following procedures are used EXCEPT:
A. reverse the payroll accrual entry.
B. compare general ledger accounts to the records for taxes withheld and paid.
C. ensure that employee paychecks are posted correctly.
D. verify the correct amount of taxes are withheld, deposited, and reported on time. - ANS-A.
reverse the payroll accrual entry.
***The general ledger should also be checked periodically to ensure that employee paychecks
are posted correctly and that the correct amount of taxes is withheld, deposited, and reported on
time. Any discrepancies should be reconciled by comparing general ledger accounts to the
records for taxes withheld and paid.***
During the current year, an employee repays wages paid in a prior year. The payroll department
should:
A. refund the federal income tax withheld to the employee.
B. adjust the repayments against current year wages.
C. advise the employee of the amount of repayments made during the year.
D. do nothing. - ANS-C. advise the employee of the amount of repayments made during the
year.
***Repayments made in the current year, but related to a prior year or years, require special tax
treatment by employees in some cases. Advise the employee of the total repayments made
during the current year and the amount (if any) related to prior years.***
The repayment of overpaid wages by an employee impacts:
