Question 1

What is Payroll Journal?

Accepted Answer

A payroll journal is like a payroll register It has salary, bonuses, commission in other words earnings, any deductions such as 401k, fsa etc, state and income taxes etc It shows the gross salary less any deductions "Net pay" for the period

Question 2

What is Payroll transaction?

Accepted Answer

Payroll Transaction is nothing but the calculation of salary for a month / week / day of an individual / group of employees depends upon the attendance / variable inputs / other benefits / salary component and generate the reports for IT / Statutory / PT payments

Question 3

What are payroll inputs? Does it changes from company to company?

Accepted Answer

Payroll input includes: Monthly,Qtrly,Yearly payments,adjustements, recoveries etc Inputs can be received either from HR or finance or both Current month New joinees, resignees recovery's etc Yes, inputs changes company to company

Question 4

What are the benefits achieved by payroll giving?

Accepted Answer

Payroll Giving enables employees to give to any UK charity straight from their gross salary (before tax is deducted), giving immediate tax relief of up to 40% on their donations

Question 5

What are the general deductions made while doing payroll for an employee in an organization?

Accepted Answer

Professional Tax ESI PF Recoveries Advances if any

Question 6

What is the minimum period to revise the Basic Salary of Employees?

Accepted Answer

Wage Revisions as per wage policy every finanical year means April of the every year will revised At the same time Basic is revised as per appointment order like we are given probation period to every employee after completion of the employee probation than basic also revised and depends upon Organisation Structure also

Question 7

What is exemption limit of gratuity

Accepted Answer

It is Rs 10,00,000 now

Question 8

What is the difference between paycheck and payslip?

Accepted Answer

Paycheck - this is the method by which the Employee is paid (A Bank Check/Cheque or Direct Deposit to Bank) Payslip - Also called as Pay Stub is the paper which will typically detail the gross income and all taxes and any other deductions such as retirement plan contributions, insurances, garnishments, or charitable contributions taken out of the gross amount to arrive at the final net amount of the pay, also including the year to date totals in some circumstances

Question 9

What is salary TDS?

Accepted Answer

Means whatever income any employee received from the organisation and on that tax to be deducted (eg Gross salary, Overtime, Bonus, Incentives etc)

Question 10

What are the activities present in payroll task?

Accepted Answer

1 Processing Payroll to generate Paycheck and Pay Stubs 2 Generating Tax reports and vouchers using which Taxes are deposited to Govt (Employee Tax) 3 Processing reports that are handed over to Accounting Dept 4 Ensuring that the Deductions, Benefits, Acruals, Taxes and Salaries are accurate ( 5 Posting the Journals to Finance 6 Processing Govt Reports and submitted to Govt 7 Entering interims (may also be done by HR in some Companies) 7 Year End Process to generate W2s

Question 11

Which of these investments may pay dividends?

Accepted Answer

Stock investment may pay the dividends. The amount of dividend will be depended on how many stocks you own and how much is that's company net income in that year For example : If you own 15 % of the company, and the company announced that they will pay Rs. 1,00,000 as dividend this year, you will get dividend payment of Rs. 15,000.

Question 12

What is the types of assets?

Accepted Answer

There are three types of assets 1 Fixed assets : Those assets which will be used by the company for a long period of time a) Tangible assets: those assets which we can see and touch and exp Land & Buildings, Plant & Machinery,Furniture, fixtures and fittings b) Intangible assets: Those assets which we can't see and touch like Goodwill, Patents, Copyrights, Trade Mark etc 2 Current assets : Those assets which can be easily converted into cash within one year like cash in hand, cash at bank, Bills receivable, stock etc 3 Fictitious assets: its not the actual assets , its the expenditure occurred at the tine of commencement of firm ( capital expenditure )like preliminary expenses, discount on issue on debenture/shares, underwriting commission etc

Question 13

What do you understand by Open Item Managed Account?

Accepted Answer

Open item management ensures that all items that have not yet been cleared are available in the system Only after every open item in a document is cleared can a document be archived

Question 14

What is accumulated loss?

Accepted Answer

A loss (or losses) from previous years carried forward in order to offset future earnings This reduces the tax burden for the years with profit as the accumulated losses are deducted from the taxable profit

Question 15

Why does the Outstanding exp & Prepared Expenses treated as Personal Account?

Accepted Answer

Because these exps are paid/payable to persons person includes Sole Proprietor, Partnership Firms, HUF, Co; etcPersonal accounts always appear in B/S until it is transfered to expenditure by debiting to P&L A/C

Question 16

What is the Debit Balance recovery? How we can recover if we wont have any future transactions from supplier?

Accepted Answer

The Debit balance recovery is usually made by raising a credit memo for the regular vendors However if there are no future transactions from the supplier, we ask the vendor to send the check / make an EFT for the amount due from him

Question 17

Which is the most accurate statement about trade?

Accepted Answer

Trade can make every nation better off

Question 18

A distinguishing feature of managerial accounting is

Accepted Answer

Managerial accounting is the process of identifying, measuring, analyzing, interpreting and communicating information for the pursuit of an organization's goals. This branch of accounting is also known as cost accounting. Hence, the distinguishing feature of managerial accounting is very detailed reports.

Question 19

A Credit may signify a

Accepted Answer

A credit may signify a decrease in an asset account or an increase in a liability or capital stock account. A debit may signify an increase in an asset account.

Question 20

Accrual accounting is used because

Accepted Answer

it provides a better indication of ability to generate cash flows than the cash basis.

Accounting and Finance Questions