Why Is a Separate Payroll Account Used to Clear Payroll

question 40

Multiple Choice

Why is a separate payroll account used to clear payroll checks?

• A) for internal control purposes to help limit any exposure to loss by the company
• B) to make bank reconciliation easier
• C) banks don't like to commingle payroll and expense checks
• D) All of the above are correct.

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Definitions:

Company's Code

A set of guidelines, ethics, or standards that a company follows to ensure legal compliance and maintain its corporate integrity.

Reciprocity

A social norm of responding to a positive action with another positive action, fostering cooperative and social behavior.

Price Discrimination

The practice of selling the same product or service at different prices to different customers, often based on factors like location, demographic, or purchase history.

Safety Mats

Protective mats designed to reduce the risk of injuries by providing a cushioned surface in various environments.