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Flashcards in Financial Management Deck (174):
1

Banking- Cashier's Check

A check the bank prepares, signed by bank official, that is directly drawn from a person's account.

2

Certified Check

A check that the bank authenticates and guarantees by setting aside the funds until it is presented for payment.

3

Counter Check

A check that the bank prepares as a substitute for a regular check to permit the drawer to withdraw funds.

4

Money order

Similar to cashiers check, but can be purchased at the post office or convenience store.

4

Limited Check

A check that is restricted by amount and time of negotiability.

5

Traveler's check

Special check prepared for those who are traveling or where personal check is not accepted or where carrying cash is not prudent.

6

Trial Balance

A list of all account balances to determine whether the debts equal the credits.

7

Balance Sheet

Is a statement that summarizes assets, liabilities and capital balances.

8

Income Statement

A financial statement that summarizes revenue and expense for a specified period.

9

Journal

An account document that serves to record all daily transaction.

10

General Journal

Is the book of all original entry of all transactions.

11

Account Balance

The balance of an account will be the difference between the debt amount and the credit amount.

12

Blank endorsement

The check has only the payee's signature. Thus making to any bearer.

13

Restrictive Endorsement

The payee directs how the check is to be paid, such as "for deposit only".

14

Bank

Is also known as a "drawer".

15

Drawer

- The depositor
- The person writing the check

16

Drawee

The bank in which the drawer has money on deposit.

17

Payee

The party to receive the money as I reacted by the drawer.

18

Types of checks

- Cashier's check
- Certified check
- Counter check
- Limited check
- Money orders
- Traveler's check

19

MICR

Magnetic Ink Character Recognition.
- preprinted forms containing MICR characters that can be read by a machine.
- The MICR include an ABA (American Banking Association) number that indicates where the bank is located and information
needed to sort and route deposit tickets and checks.

20

Check stub

Small form to the left of each check that contains spec to record all relevant information about a check and checking account balance.

21

Check register

Information recorded on the check stub, instead recorded in a booklet maintained with the bound check.

22

Dishonored checks

A check the bank refuses to pay generally because of insufficient funds deposited. (NSF- not sufficient funds).

23

Post dated checks

Checks dated after the date is was written.

24

Bank statement

Statement of account rendered to each depositor once a month by a bank.
- Balance on deposit at the beginning of the month.
- Amount of deposit credited during the period.
- Amount f checks honored (debited) during the period.
- other items debited or credited during the period.
- Balance on deposit at the end of the period.

25

Bank statement reconciliation

Is the process of adjusting both balances to reflect the transaction not represented by both the bank statement and check register in order to determine the true balance of the account. If done properly, the check register and the bank statement balance should agree after the adjustments have been made.

26

Reconciliation procedure

- Compare the deposited amounts recorded on the check register with those shown on the bank statement.

- Compare the canceled amounts with those stated on the bank statement and check register.

- Identify ll debits and credits to the account listed on the bank statement.

- Errors found on the check register that mistakenly elevate be deducted or added to the check register, respectively. Errors
should be reported to the bank promptly and adjusted accordingly.

- Add and subtract all of the bank statement and check register. Both adjusted should be equal.

27

Accounting & Bookkeeping

Describes the language of business, it's the process of recording, classifying, summarizing, reporting, analyzing, and interpreting financial and economic data.

28

Accounting & Bookkeeping purpose

Provide financial information regarding the current operation to interested parties, especially outsiders.
- Financial condition of a business: Profitability and solvency.
- Managerial performance
- Effectiveness and efficiency of operations
- Compliance with directive regulations

29

Accounting & Bookkeeping- "users of accounting information"

- Owners/managers
- Creditors
- Government agencies
- Accrediting agencies
- Third-party payers

30

Accounting & Bookkeeping- "Accounting elements"

- Assets
- Money
- Land/ building/ fixtures/ furnishings
- Machinery/ equipment
- Accounts receivable
- Securities

31

Accounting & Bookkeeping- "Assets"

Property of value owned or controlled by a business.

32

Accounting & Bookkeeping- "Securities"

Stocks and bonds.

33

Accounting & Bookkeeping- "Liabilities"

Debt obligations; creditor interest.
- Accounts payable: Suppliers/ vendors
- Notes payable: Bank debits

34

Accounting & Bookkeeping- "Revenue"

Inflow of assets through sale of product or services. Has the effect of increasing owner's equity.

35

Accounting & Bookkeeping- "Owner's equity"




The amount by which assets exceed liabilities; net worth; ownership interest; capital.
- Revenue
- Expense
- Drawing

36

Accounting & Bookkeeping- "Expense"

Outflow of assets to generate revenue. Has the effect of reducing owner's equity.

37

Accounting & Bookkeeping- "Drawing"

Withdrawal of assets for personal use. Has the effect of reducing owner's equity.

38

Accounting & Bookkeeping- "Accounting equation"

- Assets = Liabilities + Owner's Equity
- Liabilities = Assets + owner's Equity
- Owner's Equity = Assets - Liabilities

39

Accounting & Bookkeeping- Bookkeeping system

- Single-entry system
- Double entry system

41

Bookkeeping- Single-entry "system"

All transaction are recorded once using a pegboard system.
*Materials
- Pegboard
- Journal
- Ledger cards
- Charge slip/ receipt

42

Bookkeeping- Single entry
"Pegboard"

Lightweight metal or plastic board that contains pegs along the left edge to hold the corresponding perforated accounting document.

43

Bookkeeping- Single entry
"Journal"

A page that approximate the size of the pegboard also known as the daysheet, daybook, or daily log. Maintains a record of all daily charges (fees) and receipts.

44

Bookkeeping- Ledger cards

Records of all fees and payments for each patient.

45

Bookkeeping- Charge slip/ receipt

- A form used to record a charge to serve as a bill, or as a receipt given to the patient for a fee payment.
- Superbill: Multicopy charge slip that may be retained by the clinic, patient and insurance carrier.

46

Bookkeeping- Double entry

Each transaction is recorded in a way that maintains a balancing of the accounting elements.

47

Bookkeeping- Double entry
Account

Double entry- Account:
- A record used to keep track of the increases and decreases to each element of the accounting equation.
- Title and account number
- Debit and credit column
- Date column
- Posting reference

48

Bookkeeping- Double entry
"Trial balance"

Trial Balance:
- A list of all accounts by titles and their respective debit or credit balance.

49

Bookkeeping- Double entry
"Financial statement"

- Income statement (profit-loss statement)
- Balance sheet

50

Bookkeeping- Double entry- Financial statement
"Income statement"

Income statement (profit-loss statement:
- Summarizes revenue and expenses to determine the level of profit or loss.

51

Bookkeeping- Double entry- Financial statement
"Balance sheet"

Balance sheet:
- Summarizes the assets, liabilities, and owner's equity at a specific date.

52

Bookkeeping- Double entry- "Accounting documents"

Accounting documents:
- Source documents
- Chart of account
- Journal
- Ledger

53

Bookkeeping- Double entry- Accounting documents
"Source documents"

Source documents:
- Any document that indicates a transaction has occurred such as a receipt.

54

Bookkeeping- Double entry- Accounting documents
"Chart of accounts"

Chart of accounts:
- A list and numbering of all accounts.

55

Bookkeeping- Double entry- Accounting documents
"Journal"

Journal:
- A book of original entry that serves as a chronological record of all daily business transaction.

56

Bookkeeping- Double entry- Accounting documents
"Ledger"

Ledger:
A collection of individual records of each account.
- General ledger
- Account receivable ledger
- Accounts payable ledger

57

Bookkeeping- Double entry- Accounting document- Ledger
General ledger

General Ledger:
- Asset, liability, and capital accounts grouped together.

58

Bookkeeping- Double entry- Accounting document- Ledger
"Accounts receivable ledger"

Accounts receivable ledger:
- A ledger of all persons and businesses that own money to the company.

59

Bookkeeping- Double entry- Accounting document- Ledger
"Accounts payable ledger"

Accounts payable ledger:
- A ledger of all businesses the company owes money to.

60

Bookkeeping- Double entry
"Accounting Process"

Accounting process:
- The source document is reviewed to determine whether it should be ordered as a transaction.
- Journalize
- Posting
- Adjustment
- Closing
- Trial balance
- Accounting statement

61

Bookkeeping- Double entry- Accounting Process
"Journalize"

Journalize:
- Daily transactions are recorded in the journal as debits and credits.

62

Bookkeeping- Double entry- Accounting Process
"Posting"

Posting:
- Periodically, the information recorded in the journal is transferred to each ledger record reserved for the account debited or credited in the journal.

63

Bookkeeping- Double entry- Accounting Process
"Adjustments"

Adjustments:
- Accounts are adjusted for any changes in the amounts not already recorded.

64

Bookkeeping- Double entry- Accounting Process
"Closing"

Closing:
- Expense and revenue accounts are closed (zeroed out) at the end of the accounting period.

65

Bookkeeping- Double entry- Accounting Process
"Trial Balance"

Trial balance:
- At the end of an accounting period (month or year), a trial balance is prepared.

66

Bookkeeping- Double entry- Accounting Process
"Accounting Statements"

Accounting statements:
- From the trial balance an income statement and balance sheet is prepared.

67

Bookkeeping- Accounts "Receivable"

Accounts receivable:
- Fees owed by patients for service rendered.
- Often clinics receive less than the total charge for patient services due to:
- Uncollectible accounts balance
- Charity allowance
- Contractual allowance (discounts)
- Courtesy allowance

68

Bookkeeping- Accounts Receivable
"Uncollectible Accounts Allowance"

Uncollectible accounts allowance:
- bad debts, unpaid fees

69

Bookkeeping- Accounts Receivable
"Charity Allowance"

Charity allowance:
- Discounts given to indigent patients.

70

Bookkeeping- Accounts Receivable
"Contractual Allowance (discounts)"

Contractual accounts (discounts):
- Lower fees paid by third-party payers.

71

Bookkeeping- Accounts Receivable
Courtesy Allowance

Courtesy Allowance:
- Discounts given to employees, physicians, and clergy.

72

Bookkeeping- Aging Accounts "Receivable"

Aging accounts receivable:
- Process of classifying each account receivable according to the amount of time the balance is unpaid.
- Aging categories include current, 31-60, 61-90, 91-120, and greater than 120 days past due.
- Category = age category total / total accounts receivable x 100.

73

Bookkeeping- Accounts Payable

Money owed to outside businesses for sales and services rendered.

74

Bookkeeping- Petty Cash Fund

A cash amount maintained in the office to pay minor expenses, eliminating the need to write a check.
- Petty cash voucher
- Petty cash register
- Replenishment

75

Bookkeeping- Petty Cash Fund
Petty Cash Voucher

Petty cash voucher:
- A special form of receipt showing the name of the payee, the amount, the purpose of payment, and the account to to charged is generally required to aid in controlling the fund.

76

Bookkeeping- Petty Cash Fund
"Petty Cash Register"

Petty Cash Register:
- A record having multiple columns used to record petty cash disbursement.

77

Bookkeeping- Petty Cash Fund
"Replenishment"

Replenishment:
- When the fund has reached a low enough level, a check is written to cover all of the disbursement since the last replenishment period to bring the fund back up to the designated amount.

78

Billing & Collection

- Billing: Maintain consistent generation of revenue and even, steady cash flow.
- Collection clearly defined and made known to the patient.

79

Billing & Collection- Professional "Fee Structure"




Professional fee structure:
- Should reflect the revenue needed to maintain the financial stability of a practice.
- Fees are influenced by the time and degrees of difficulty in providing the service.
- Fees should cover operating expenses such as labor, materials, and overhead.

80

Billing & Collection- Fee Schedule




- A list of common service with accompanying code numbers, description, and prices.
- Under federal regulations, the fee schedule explaining this patient right should be posted in the office.

81

Billing- Fee Schedule

- A list of common service with accompanying code numbers, description, and prices.
- Under federal regulations, the fee schedule explaining this patient right should be posted in the office.

82

Billing & Collection- Usual, Customary, and Reasonable charges (UCR)

- Usual fee: Fee that a provider most frequently charges for a service.
- Customary Fee: Range of usual fees charged for the same service by practitioners of similar training and experience within a geographic area.
- Reasonable: A fee assigned to a service that has some unusual or complex features. It typically meets the criteria of both usual and customary.

83

Billing & Collection- Usual, Customary, and Reasonable charges (UCR)

- Usual fee: Fee that a provider most frequently charges for a service.
- Customary Fee: Range of usual fees charged for the same service by practitioners of similar training and experience within a geographic area.
- Reasonable: A fee assigned to a service that has some unusual or complex features. It typically meets the criteria of both usual and customary.

84

Billing & Collection- Fee Discounts and Allowances



- It is better to adjust a fee before rather than after treatment.
- Reducing the fee after treatment may imply that a lower quality of care was rendered.
-Discounts may be commonly given to fee-for-service patients or for cash payments.

85

Billing & Collection- Release of Information




Release of information:
- Used to request information from other providers and to authorize third parties such as insurance company to be given information.
- The release is good for 1 year.

86

Billing & Collection- Release of Information

Release of information:
- Used to request information from other providers and to authorize third parties such as insurance company to be given information.
- The release is good for 1 year.

87

Billing & Collection- Assignment of Benefits

Requests insurance payments to be sent directly to the provider rather than the patient.

88

Billing Systems-Ttime-of-service

Time-of-service:
-

88

Billing Systems- Time-of-service

Time-of-service:
- Fees are collected when the service is rendered. Improved cash flow and reduces collection costs.

89

Billing- Monthly billing

Monthly billing:
Sending the patient a bill on a monthly basis.

90

Billing- Cycle billing

Cycle billing:
Billing segments of the patient population at different times consistently each month; e.g., patients names starting A-F are billed the first week of each month, G-L the second week, and so on.

91

Billing- Credit/debit card billing

Credit/debit card billing:
Payment is made using a major credit card or debit card.

92

Billing- Billing service

Billing service:
The clinic contracts with an outside agency to prepare and mail patient bills.

93

Billing Statements

Statements must be neat and accurate.
- Typed statement
- Ledger cards
- Superbill
- Computerized

94

Billing Statements- Typed statements

Typed statements:
Each bill is individually typed. Out-of-date and time-consuming process.

95

Billing Statements- Ledger Cards

Photocopied and mailed to the patient.

96

Billing Statements- Superbill

Superbill:
- Given to the patient at the visit for payment or remitted at a later time usually within 30 days.

98

Billing Statements- Computerized

Computerized:
- Financial data is keyed into a computerized and statements are automatically prepared.

99

Fidelity bond:

- Insurance against embezzlement.
- Employees handling money should be bonded. The insurance or bonding agency replaces an amount that is stolen or lost.
- Personal bond
- Position-schedule bond
- Blank-position bond

100

Personal Bond

Covers an individual; requires a thorough background investigation and is usually done for persons handling large sums.

101

Position-scheduled bond

Covers a specific job title, such as bookkeeper, rather than a named individual.

102

Blanket-position bond

Covers all employees.

103

Credit Arrangements

A service rendered before payment is an extension of credit.

104

Equal Credit Opportunity Act

Federal law requiring equal extension of credit to all person demonstrating ability to pay. Prohibits discrimination.

105

Federal Truth in Lending Act

- Enforced by a Federal Trade Commission (FTC).
- Governs interest charges or installment agreement of more than 4 payments.
- Regulation Z: Requires completing a form disclosing information regarding finance charges.

106

Fair Debt Collection Practices Act

Federal law prohibiting abusive, deceptive , and unfair debt collection activities.

107

Collections

- The difficulty in collecting an account increases proportionately to its age.
- Do not attempt to collect a debt through a third party.

108

Collections- Rationale

- Revenue must be collected to cover expenses.

109

Collections- Rationale
Potential loss of patient

Potential loss of patient:
- Patient may not keep appointments out of embarrassment or may change providers.

110

Collections- Rationale
Noncollection may imply guilt

Noncollection may imply guilt:
- The patient may perceive that inadequate care was provided.

111

Collections- Rationale
Noncollection encourages nonpayment

Noncollection encourages nonpayment:
- The added costs of nonpayemnt may be unfairly shifted to paying patients.

112

Collections Mailings- Dun message


Dun message:
- Dunnen meaning "to make a loud noise".
- A dun message is a reminder to the patient regarding payment of a debt.

113

Progressive Collection Process


A color or written codes should be developed to keep track of collection efforts. At a minimum, create a codling system to symbolize the following actions.

114

Progressive Collection Process- Coding system to symbolize the following actions.







- First bill sen pending receipt of payment
- A friendly reminder or two sent after 1 month.
- Telephone calls requesting payment.
- Collection letters sent.
- Final notice sent.
- Forwarding account to collection agency.
- Updates on collection agency attempts.
- Legal action such as small claims, lawsuit, etc.

115

Collections- Disputed Charges

Disputed charges:
- The patient does not agree with the amount.

116

Collections- Tracking Skips




Tracing skips:
- Skips: Person who has moved purposely to avoid collection efforts.
- It is illegal to communicate with a third party more than once.
- Check with DMV for an address change.

117

Collections- Claims against estates







A bill owed by a deceased patient requires the filing of a claim against the patient's estate.
- A creditor's claim form should be filed with the patients attorney or estate executor, or the county probate clerk.
- The claim should show an itemization of the bill, the total amount due, and the provider's signature.

118

Collections- Bankruptcy

Filed under federal law when a business or individual has debts that exceed assets.

119

Billing Minor's

Determine the person financially responsible for the minor's care at the first visit. Unless the minor is emancipated in some fashion or can receive care without parental consent (e.g., birth control, substance abuse, etc.), a legal guardian should be billed.

120

Garnishment

- Attaching personal assets, especially wages, to pay debts.
- The Consumer Credit Protection Act limits the amount of employees earnings withheld for garnishment.

121

Fair Labor Standards Act (FLSA)

- Also known as "federal wage and hour law".
- Sets the minimum wage employers are required to pay employees.

122

Title VII (7)-- Civil Rights Act of 1964

Prohibits discrimination in hiring, firing, or promoting employees because of race, color, religion, notional origin, or gender.

123

Age Discrimination in Employment Act

Prohibits the use of unfair employment practices regarding people over 40 years of age.

124

Americans with Disabilities Act of 1990 (ADA)

Prohibits unfair employment practices regarding occupationally qualified persons with disabilities. The law requires that employers make reasonable accommodations for such disabilities.

125

Employee Retirement Income Security Act (ERISA)

Protects pension fund and regulates pension fund operations.

126

Employee Retirement Income Security Act (ERISA)

Protects pension fund and regulates pension fund operations.

127

Immigration Reform Act of 1985

Employees must certify that newly hired employees are either United States Citizens or authorized to work in the U.S.

128

State Minimum Wage Law

Some states set their own minimum wage rate; state rates must be higher than the federal rate.

129

Worker's Compensation Law





Most states have laws requiring employers to provide employees with worker's compensation insurance, which protects employees from losses associated with job-related illness, injuries, or death. Employers must purchase such insurance or contribute to a state fund.

130

State Disability Benefit Laws

California, Hawaii, New Jersey, New York, Rhode Island, and Puerto Rico have laws intended to provide disability insurance to employees who are absent from work because of illness or injuries that are not job-related.

131

Immigration and Nationality Act

- Employers are required to verify that all employees, U.S. citizens or not are authorized to work.
- Employment Eligibility Verification for I-9 is completed for each new hire and filed with the Immigration and Naturalization Service (INS) within 3 business days.

132

Gross earnings- Absence

Although some states may have specific requirements, FLSA don't require employers to pay employees for hours not worked because of illness.

133

Gross earnings- Absence

Although some states may have specific requirements, FLSA does not require employers to pay employees for hours not worked because of illness.

134

Gross Earnings- Tardiness

Unless required by state law, FLSA don't require employers to pay employees for periods of tardiness.

135

Gross earnings- Rest periods/coffee breaks

Unless required by state law, FLSA don't require employees be given rest periods; however, if the time spent on a rest period is 20 minutes or less, the time must be counted as hours worked.

136

Gross- Rest periods/coffee breaks

Unless required by state law, FLSA don't require employees be given rest periods; however, if the time spent on a rest period is 20 minutes or less, the time must be counted as hours worked.

137

Gross earnings- Meal periods

Unless determined otherwise by state law, only meal periods during which the employee is relieved from duty may be considered nonworking time and don't require compensation.

138

Employee

A person who performs specified job duties in the U.S.

139

Employee

Compensation for administrative, managerial, or professional work.

140

Salary

Compensation for administrative, managerial, or professional work.
- Exempt
- Nonexempt

141

Salary- Exempt

A salaried employee is exempt from FLSA rule requiring overtime at time and half. The employer is not required to pay time and a half for overtime.

142

Salary- Nonexempt

The employer is required to pay time and a half for overtime.

143

Wage

Compensation for skilled or unskilled labor. Generally, wage employees must be paid minimum of time and a half for overtime.

144

Independent contractor

One who provides a service for a fee.

145

Payroll Taxes- Income tax
"The Current Tax Payment Act"

The Current Tax Payment Act of 1943:
- Requires employers to withhold income tax on a pay-as-you-go basis.

146

Federal Insurance Contribution Act (FICA)

- Social Security and Medicare Tax.
- FICA consists of 2 main parts that are reported separately.
1. Old-age survivors, and disability insurance (OASDI)
2. Hospital insurance (Medicare)

147

Tax rates

- OASDI = 6.2%
- Medicare = 1.45%
- FICA total is 7.65%.

148

Tax rates

OASDI = 6.2% = 1.45%; FICA total is 7.65%.

149

Unemployment compensation tax

Federal and state programs established by the Social Security Act of 1935 to provide economic security during periods of temporary unemployment.

150

Payroll tax returns, reports and forms: - Form SS-4

Application for employers identification number. Federal tax identification number application. Required for employers withholding taxes from employees. States may require a separate number for state withholdings.

151

Payroll tax returns, reports and forms: - Form SS-5

Social Security number application.
All employees are required to have a SS number.

152

Payroll tax returns, reports and forms: -Form SS-5

Social Security number application.
All employees are required to have a SS number.

153

Payroll tax returns, reports and forms: - Form W-2

Form W-2:
- Wages and Tax statement. Given to employees to identify earnings and taxes witheld, as well as to prepare personal tax returns.
- Must be provided to employees no later than January 31 of the following year.

154

Form W-2 packet of 6 sheets

- Copy A: Sent to Social Security Administration.
- Copy 1: Sent to sate tax department.
- Copy B: Filed with employee's federal tax returns.
- Copy C: Kept by employee for personal record.
- Copy 2: filed with employee's state tax return.
- Copy D: Kept with by the employer.

155

Payroll tax returns, reports and forms: - Form W-4

Form W-4:
- Employee's Withholding Allowance Certificate.

156

Payroll tax returns, reports and forms: - Form 940 and Form 941

- Form 940:
- Employer's Annual Federal Unemployment Tax Return. Must be filed by January 31, annually.
- Form 941:
- Should be filed by April 30, July 31, October 31, and January 31, annually.

157

Pay Deductions

- Income tax
- FICA, FUTA, & SUTA
- Garnishment
- Tax levies
- Union contracts
- Insurance
- Pensions
- Miscellaneous
- Net earnings

158

Pay Deductions- Income tax

Income tax:
- The most common is the wage-bracket (tax table) method.

159

Pay Deductions

- Income tax
- FICA, FUTA, & SUTA
- Garnishment
- Tax levies
- Union contracts
- Insurance
- Pensions
- Miscellaneous
- Net earnings

160

Pay Deductions- Income tax

Income tax:
- The most common is the wage-bracket (tax table) method.

161

Pay Deductions- FICA, FUTA and SUTA

- FICA: Federal Contribution Act
- FUTA: Federal Unemployment Tax Act
- SUTA: State Unemployment Tax
- The percentage rate is multiplied by the taxable gross earnings.

162

Pay Deductions- Insurance

Insurance:
- Such as life, medical or dental insurance.

163

Pay Deductions- Union contracts

Union contacts:
- Such as union initiation fees, dues and assessments.

164

Pay Deductions- Insurance

Insurance:
- Such as life, medical or dental insurance.

165

Pay Deductions- Net earnings (pay)

Is computed by subtracting all deductions from gross earnings.

166

Pay Deductions- Miscellaneous

Miscellaneous:
- Includes such deduction as savings plan, charitable contributions, or stock or bond purchase plans.

167

Payroll System- Manual




Manual:
- Payroll is computed and processed by hand, using a calculator, typewriter, and forms. Pegboard payroll system, a payroll register is placed on a board containing alignment pegs.

168

Payroll System- Computerized



Computerized:
- Payroll data is entered into the computer, where the necessary calculations, records and reports are prepared automatically.

169

Payroll System- Manual

Manual:
- Payroll is computed and processed by hand, using a calculator, typewriter, and forms. Pegboard payroll system, a payroll register is placed on a board containing alignment pegs.

170

Payroll System- Computerized

Computerized:
- Payroll data is entered into the computer, where the necessary calculations, records and reports are prepared automatically.

171

Payroll System- Payroll processing service bureau

Payroll processing service bureau:
- Payroll data is sent to the service bureau. The service bureau processes the data by computer and delivers the completed payroll records and checks.

172

Payroll register

- Provides a summary of hours worked, earnings, deductions, and net pay for all employees each payroll period.

173

Employee earnings record

- Provides detailed annual payroll data on each employee.

174

Payroll accounting

Payroll records are sent to the accountant or bookkeeper to be entered in the journal and posted to the ledgers, so that timely and accurate financial statements and tax returns can be prepared.