Why should employee paychecks be drawn against a special checking account?
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.
You might also like to view...
For which of the following reporting issues has the FASB adopted substantially the same approach as the IASB?
a. Segment reporting b. Earnings per share c. Statement of cash flows d. Pension plans
Which of the following is most likely to be considered to be a service (rather than a good)?
a. Child’s toy b. Loan from a bank c. Light bulb d. Car
In the sentence Jon tweeted on his new Samsung smartphone, the verb tweeted is ____
A) transitive B) intransitive C) linking D) helping
Julia Staines entered into an agreement with Cellco for the provision of a cell phone
The agreement which she signed provided as follows: Late payment charge increase Due to an increase in the prime interest rate, effective January 1, 2008, Cellco increased the amount it charges on overdue accounts to 1.25% per month or 16.07% per year. Julia had possession of the cell phone for only three months when she started missing the due dates for payment of the charges she incurred. Julia decided to review her statement from Cellco and saw that she was being charged interest of 1.25% per month. She has decided to challenge the amount charged for interest in Court. Which of the following statements applies to the situation? A) no interest should be charged on her account B) the rate of interest charged is legal C) the rate of interest charged breaches the Canada Criminal Code D) the rate of interest cannot exceed the prime interest rate E) this rate of interest would be considered a penalty