What is the purpose of a general ledger payroll clearing account?
A) to check the accuracy and completeness of payroll recording and its allocation to cost centers
B) to make the bank reconciliation easier
C) to make sure that all employees are paid correctly each week
D) to prevent the cashier from having complete control of the payroll cycle

Question

Quizplus · Accepted Answer

The purpose of a general ledger payroll clearing account is to check the accuracy and completeness of payroll recording and its allocation to cost centers. By recording payroll transactions in a clearing account, it is possible to reconcile the payroll records with the general ledger and ensure that payroll expenses are properly allocated to the appropriate cost centers.

Option B is incorrect as a payroll clearing account has nothing to do with bank reconciliation.

Option C is incorrect as payroll clearing accounts do not directly affect the payment of employees.

Option D is incorrect as a payroll clearing account does not prevent the cashier from having complete control over the payroll cycle.

What Is the Purpose of a General Ledger Payroll Clearing