i. Understanding payroll system.
ii. Types of transactions and financial statements affected. iii. Types of documents and records involved in the payroll cycle. iv. Major functions in the payroll cycle.
1. Understanding payroll system. (What is payroll system?) * A payroll system involves everything that has to do with the payment of employees and the filing of employment taxes. This includes keeping track of hours, calculating wages, withholding taxes and other deductions, printing and delivering checks and paying employment taxes to the government. * These systems also can help the business owner calculate the amount of taxes they owe the government at the end of each quarter. * Payroll services can also be performed offsite. Many companies specialize in providing payroll systems to other businesses. * Payroll systems are very simple to use. They can easily be incorporated into any business applications being used by the company. The use of this type of system in a company will help ensure that the company remain up-to-date with the current tax laws and the company obligations to the different taxing authorities. 2. Types of transactions and financial statements affected. * Two main types of transactions are processed through the payroll cycle. * Payments to employees for services rendered.
* Accrual and payment of payroll-related liabilities arising from employees’ services, including liabilities for Employee Provident Fund (EPF) and Social Security (Socso). * The financial items that are generally affected by the two types of payroll-related transactions are : * Payroll transactions (cash, inventory, direct and indirect labour expense, various payroll-related liability and expense) * Accrued payroll liability transactions ( cash, various accruals such as Employee provident Fund, Social security and pension costs)
3. Types of documents and records involved in the payroll...
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