Payroll Accounting and Reconciliation Flashcards

What is the purpose of a payroll journal entry in ADP and which accounts are typically affected?

Answer: To record the payroll expense, tax liabilities, and net pay; accounts include Wages Expense, Payroll Tax Expense, FICA Payable, Federal Income Tax Payable, and Cash

Payroll journal entries in ADP record gross wages, deductions, tax liabilities, and net pay, affecting multiple expense and liability accounts in the general ledger.

In ADP, which module or feature maps payroll data to the employer's general ledger accounts?

Answer: ADP General Ledger (GL) Interface

The ADP General Ledger Interface maps payroll earnings, deductions, and taxes to the employer's specific chart of accounts for seamless accounting system integration.

What is payroll reconciliation and how frequently should it be performed?

Answer: The process of comparing payroll register totals to tax filings, bank statements, and the general ledger; it should be performed each pay period and at quarter-end

Payroll reconciliation involves matching payroll register data against tax filings, bank transactions, and the general ledger and should occur each pay period to catch errors early.

When reconciling payroll, what does a variance between gross wages on the payroll register and wages on Form 941 typically indicate?

Answer: A missed adjustment such as a correction, voided check, or non-taxable wage exclusion that was not properly recorded

Variances between the payroll register and Form 941 usually indicate an adjustment, voided transaction, or non-taxable exclusion that was not consistently handled in both records.

What is the role of an 'accrued payroll' journal entry at month-end?

Answer: To recognize wages earned but not yet paid by the end of the accounting period in the company's financial statements

Accrued payroll entries record the liability for wages earned during the accounting period but not yet paid, ensuring accurate financial statements under accrual accounting.

In ADP, what is the purpose of the Payroll Summary Report when conducting an end-of-period reconciliation?

Answer: To provide totals for gross pay, deductions, taxes, and net pay by employee and department for reconciliation against the general ledger

The Payroll Summary Report in ADP aggregates gross pay, deductions, taxes, and net pay by employee and cost center, serving as the primary reconciliation document for accounting purposes.