Chapter 7 Banking and Payroll Banking and Payroll
Chapter 7 Banking and Payroll
Banking and Payroll 7 -1 Banking Procedures 7 -2 Payroll and Employee Benefits
7 -1 Banking Procedures Objectives 7 -1 a Describe procedures for safeguarding cash and handling a cash drawer. 7 -1 b Describe procedures for deposits, checks, and electronic funds transfers. 7 -1 c Apply procedures for completing a bank account reconciliation.
Key Terms • • check debit card forge audit bonding endorsement electronic funds transfer bank reconciliation
Handling Cash • A check is a written order to a bank to make a payment using funds from the depositor’s bank account. • A debit card is a kind of bank card used to make payments from a depositor’s bank account. • Safeguarding Cash – To forge is to imitate or counterfeit for illegal purposes. – Preventive Internal Control – Detective Internal Control • An audit is done to verify or check facts or procedures. – Corrective Internal Control • Bonding refers to insurance for financial loss due to employee theft or fraud. • Handling a Cash Drawer
Depositing and Transferring Funds • Making Deposits – Endorsements • An endorsement is a name placed on the back of a check that authorizes a bank to cash or deposit the check. – Deposit Forms – Lockbox Deposits • Preparing Checks – Checks Prepared Individually – Computer-Generated Checks – Special Checks
Depositing and Transferring Funds (continued) • Transferring Funds Electronically – Electronic funds transfer is using a computer network to send money from one party to another.
Reconciling a Bank Account • A bank reconciliation is a report used to compare bank and company account records. • Bank Statement and Company Records • Steps in Preparing a Reconciliation
7 -2 Payroll and Employee Benefits Objectives 7 -2 a Describe common plans for paying employees. 7 -2 b Describe typical employee benefits. 7 -2 c Apply procedures for completing payroll records.
Key Terms • • gross pay overtime commission compensation insurance premium payroll net pay
Employee Payment Plans • Salary and Wages – Gross pay is the salary or wages earned before deductions are made. – Overtime refers to the hours worked beyond the set standard hours per week. – Commission and Other Plans • A commission is a payment based on an amount of items sold or produced.
Employee Benefits • Compensation is the pay or benefits given for a service or a loss. • Paid Time Off – Holidays and Vacation Days – Sick Days • Group Insurance – Insurance is a process in which a company agrees to pay compensation for loss in return for payments by the insured. – Health, Life, and Disability Insurance • A premium is the payment for an insurance plan. – COBRA
Employee Benefits (continued) • Retirement Plans and Other Benefits – Defined Benefit Pension Plan – 401(k) and 403(b) Accounts – Other Benefits
Payroll Records • A payroll is a list of the amount of salary, wages, or other payments for work due to employees. • Deductions from Earnings – Deductions Required by Law – Voluntary Deductions • Payroll Records
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