Why should employee paychecks be drawn against a special checking account?

What will be an ideal response?


A separate imprest account is established for the exact amount of the payroll based on the payroll summary. When the paychecks are cashed, this account should clear leaving a zero balance. Any errors in checks (additional checks or abnormal amounts) would result in a non-zero balance in the imprest account and/or some paycheck would not clear. This will alert management to the problem so corrective action can be taken.

PTS: 1

Computer Science & Information Technology

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