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Unformatted text preview: Accounting 311 Final Exam Study Guide Chapter 6 Payroll and Fixed Assets Systems Payroll system departments o Personnel Department Prepares personnel action forms to the prepare payroll function Payroll actions forms identify employees authorized to receive a paycheck and are used to reflect changes in the pay rates, deductions and job classification o Production Department Job tickets say time workers spend on each production job. Cost accounting allocates direct labor to WIP Time cards capture amount of time employee is at work. They are then sent to the prepare payroll function for calculating paycheck. Formal record of daily attendance, reviewed and signed by supervisor then sends to payroll department o Update WIP Account After cost accounting allocates labor costs to WIP, charges are summarized in a labor distribution summary then forwarded to general ledger function o Payroll Department Receives pay rate and data from personnel dept. and hours worked data from production department 1. Prepares payroll register gross pay, deductions, overtime, net pay 2. Enters info into employee payroll records 3. Prepares paychecks 4. Sends paychecks to distribute paycheck function 5. Files time cards, personnel aciton form, and copy of payroll register o Distribute Paycheck Paymaster distributes paychecsk to employees to prevent fraud Independent of the payroll process o Prepare Accounts Payable AP reviews payroll register and prepares copy of Cash Disbursements voucher then records it in the voucher register and submits the voucher packet to cash disbursements o Prepare Cash Disbursements Prepares single check for entire amount and deposits it into the payroll imprest account Paychecks drawn on this account, only used for payroll Journal voucher prepared and sent to the general ledger function o Update General Ledger Receives labor summary from cost accounting, disbursement voucher from AP and journal voucher from cash disbursements Makes sure debits equal credits Payroll Controls o Transaction Authorization Personnel action form helps payroll keep employee records current to avoid fraud involving submitting time cards for employees who no longer work for the company o Segregation of Duties Time keeping function and personnel function should be separated Payroll function has both asset custody (employee paychecks) and record keeping responsibility (employee payroll records) Payroll transaction between AP and CD function returns control to process AP reviews word done by payroll and approves payment. CD writes checks o Supervision Supervisors should observe time-keeping process and reconcile time cards with actual attendance o Accounting Records 1. Time cards, job tickets, disbursement vouchers 2. Journal info: labor summary, payroll register 3. Subsidiary ledger accounts, contain employee records and expense accounts3....
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