If a Company Uses a Special Payroll Bank Account

question 161

Multiple Choice

If a company uses a special payroll bank account:

• A) The company does not need to issue paychecks.
• B) The company draws one check for the entire payroll on the regular bank account and deposits it in the payroll bank account.
• C) The company must use a federal depository bank for the payroll bank account.
• D) There is no need for a payroll register.
• E) There is no need to issue W-2's.

---

Definitions:

Net Increase

The difference between the current and previous period's amounts, indicating growth when positive.

Investment Account

An account held at a financial institution that is used to buy and hold various investment assets, like stocks, bonds, mutual funds, and ETFs, often used for long-term financial goals.

Equity Method

An accounting technique used to record the investments made in other companies, reflecting the investor's proportional share of the investee's net income or loss.

Undervalued Inventory

Undervalued inventory occurs when the recorded cost of inventory is less than its current market value, potentially misstating a company's financial position.