PAYROLL ACCOUNTING 35TH EDITION COMPREHENSIVE EXAM SCRIPT WITH SOLUTIONS

PAYROLL ACCOUNTING 35TH EDITION
COMPREHENSIVE EXAM SCRIPT WITH
SOLUTIONS


◉ General Journal Conventions.
Answer: - The date of the transaction is attached.
- The Debit part of the transaction is on the first line and is flush-left
in the column.
- The Credit part of the transaction is on the second line and is
indented slightly.
- A brief description of the transaction is on line three.
- Account numbers are annotated in the Post Reference column


◉ Payroll Accruals and Reversals.
Answer: Payroll may be split between two months


Need to reflect the accrued payroll due but not paid and match the
expenses to the correct period


Create adjusting entry

, ◉ General Ledger Posting Practices.
Answer: Each line has a date
Description only used for adjusting, closing, and reversing entries
Post Reference is a combination of letters and numbers that denotes
data source
First pair of Dr. and Cr. are used to record General Journal entry
Second pair of Dr. and Cr. are used to update account balance


◉ Payroll Effects on the Accounting System.
Answer: Payroll reflects a business expense
Reduces profitability in proportion to wages paid
Payroll expenses must be allocated to correct accounts and
departments
Bulk of accountant's work is considered a business overhead cost
Not traceable to a single department


◉ Accounting Reports.
Answer: Income Statement
- Shows revenue and expenses of the firm


Balance Sheet