Question

To minimize the opportunities for fraud, unclaimed cash payroll should be:

A. Deposited in a safe deposit box.
B. Held by the payroll custodian.
C. Deposited in a special bank account.
D. Held by the controller.

Answer 1

Unclaimed cash payroll should be deposited in a special bank account to minimize opportunities for fraud, due to the security and safety provisions, including FDIC insurance.

Step-by-step explanation:

To minimize the opportunities for fraud, unclaimed cash payroll should be deposited in a special bank account. This method ensures that the funds are not only secure but also properly accounted for. Keeping unclaimed wages in a bank account adds a layer of security and audibility that a safe deposit box, payroll custodian, or controller might not provide. In relation to the provided reference information, it's important to note that bank deposits are considered liabilities for the banks because they owe these to their customers. Moreover, the Federal Deposit Insurance Corporation (FDIC) ensures that money in bank accounts up to $250,000 is guaranteed even if the bank goes bankrupt, further accentuating the safety of bank accounts for handling unclaimed payrolls.