1) Which of the following describes the class of transactions associated with payroll?

A. posting costs of purchasing inventory

B. writing off damaged inventory dropped by employees

C. payment of withholding taxes and benefits

D. payment of employee services

2) Assume that a client with excellent internal controls uses an imprest payroll bank account. Explain why the verification of the payroll bank reconciliation ordinarily takes less time than the tests of the general bank account, even if the number of cheques exceeds those for the general account.

A. An imprest payroll account maintains a $0 account balance. Assets with no or immaterial balances do not require extensive testing.

B.This account typically requires less extensive testing because of its purpose as solely a cheque-clearing account (and not as a depository account). While a large volume of disbursements are made from this account, such disbursements are typically small in nature, and recurring, which is inherently less risky and easier to test.

C.This account typically requires less extensive testing than general bank accounts because an imprest payroll account has no activity other than payroll disbursements and deposits made to re-establish the standard minimum account balance.

D. None of the above is correct.

Can you please help answer these two multiple choice questions!!