Question

Which of the following statements is not true?

1) Routine payroll processing begins with the submission of time cards.
2) Payroll clerks must verify the hours reported on the time cards.
3) Payroll reconciles personnel action forms with time cards and prepares paychecks.
4) Cash disbursements signs paychecks and forwards them to the paymaster for distribution.

Answer 1

The fourth statement, which claims 'Cash disbursements signs paychecks and forwards them to the paymaster for distribution,' is not true as it is generally the responsibility of an authorized payroll department signatory, not 'cash disbursements,' to sign paychecks. The correct option is D.

Step-by-step explanation:

To address the student's question regarding the accuracy of statements about payroll processing, we need to consider the typical steps involved in handling payroll. We begin with statement 1: "Routine payroll processing begins with the submission of time cards." This is typically true as employees, particularly in factory settings, often document their attendance by "clocking in" and "clocking out" with time cards that track their working hours.

Moving on to statement 2: "Payroll clerks must verify the hours reported on the time cards." This is also true, as part of the payroll clerk's job is to ensure the hours reported on the time cards match the hours worked by employees, thus preventing potential errors in payroll.

Statement 3: "Payroll reconciles personnel action forms with time cards and prepares paychecks." This statement is accurate because reconciling time cards with personnel action forms is part of ensuring the correct payment calculations before checks are prepared.

Finally, we address statement 4: "Cash disbursements signs paychecks and forwards them to the paymaster for distribution." The phrase 'Cash disbursements signs paychecks' is not typically true because it is generally the authorized signatory or a representative from the payroll department who signs the paychecks, not a 'cash disbursements' role. Therefore, statement 4 does not correctly describe the payroll process.

The subject matter of this inquiry is within the realm of business practices, specifically focusing on the payroll processes and procedures that govern the relationship between employers and employees. Knowledge of these practices is essential for managing the payroll tax and compliance with regulatory requirements.