The collection and processing of all information

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Unformatted text preview: g of all information needed to prepare and issue payroll checks. 2. The generation of payroll records needed for accounting purposes and for reporting to government agencies, management, and others. Businesses with many employees often hire a payroll clerk . The payroll clerk responsible for preparing the payroll • • • • • makes sure employees are paid on time, makes sure each employee is paid the correct amount, completes payroll records, submits payroll reports, and pays payroll taxes. All payroll systems have certain tasks in common, as shown in Figure 12–1. 310 Chapter 12 Payroll Accounting 308-337_CH12_868829.indd 310 9/15/05 11:42:15 AM ns deductio Calculates gs in rn Ca lc ul at es ea THE PAYROLL SYSTEM roll ts pay Repor on ati inform ment ern to gov Records earnings and deductions in the payroll and accounting records Prepares payroll checks Figure 12–1 The Payroll System Computing Gross Pay How Do You Calculate Gross Earnings? Most employees are paid for the specific amount of time they work during a pay period. The total amount of money an employee earns in a pay period is the employee’s gross earnings , or gross pay. The gross earnings expense is sometimes called salary expense. The method used to compute gross pay depends on the basis on which an employee is paid. Employees can be grouped into different pay categories: • • • salary hourly wage commission • • salary plus commission or bonus piece rate Some employees are entitled to overtime pay. Let’s look at each method of paying employees. Salary One common method of paying employees, especially those who are managers or supervisors, is by salary. A salary is a fixed amount of money paid to an employee for each pay period. In other words, an employee who is paid a salary earns the same amount regardless of the number of hours worked during the pay period. For example, Paula Ferguson, an administrative assistant, is paid a salary of $2,000 a month. Her gross earnings are $2,000 for each monthly pay period. Paula m...
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This note was uploaded on 01/16/2014 for the course BUSINESS Accounting taught by Professor Dr.stevenhall during the Fall '13 term at Del Mar College.

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