CPP - SECTION 11 - PAYROLL ACCOUNTING EXAM QUESTIONS AND ANSWERS 100% CORRECT!!

What is the chart of accounts? - ANSWER Lists each account by name and number, with the number being used to identify accounts in a manual or computerized system. The five types of accounts that are generally used by businesses to classify transactions: - ANSWER Asset Liability Expense Revenue Equity Payroll expenses may be recorded functionally or by type of pay: - ANSWER If papyroll expenses are recorded functionally, entrieds must be based on teh processes supported by the expenses. (e.g. manufacturing, sales, administration)This means that the payroll would have to be distributed into different labor distribution expense accounts and a separate Labor Distribution Subsidiary Ledger would have to be kept. Recording payroll expenses by type of pay can be done where the payroll register breaks down employees' wages into regular and overtimwe pay. Internal controls - ANSWER Within a payroll system there are checks and balances to ensure the accuracy of a company's financial records and the security of its assets. Explain accrual accounting as it pertains to payroll. - ANSWER Revenue is organized and recorded when earned and expenses are recognized and recorded when incurred. Accrual entries are made at the end of the accounting period to estimate payroll expenses and liabilities incurred between the end of the last payroll period and the accounting period end. What are earnings per share? - ANSWER Earnings per share show the company's net income divided by the weighted average number of outstanding shares of stock. What is the purpose of an external audit? - ANSWER -to determine the accuracy of fi