Accounting and Finance Questions

The tax payable on a non-salary benefit provided to an employee or an associate of the employee. The employer is liable to pay any FBT and may choose to recover the FBT amount from the employee.

Most modern banking systems are based on Fractional reserves.

Fractional-reserve banking is the practice whereby a bank accepts deposits, makes loans or investments, but is required to hold reserves equal to only a fraction of its deposit liabilities. Reserves are held as currency in the bank, or as balances in the bank's accounts at the central bank.

1. In a fractional reserve banking system banks can create money through the lending process.

2. A fractional reserve banking system is susceptible to bank panics.

3. Bank panics are a risk of fractional reserve banking, but are unlikely when banks are highly regulated and lend prudently.

A credit may signify a decrease in an asset account or an increase in a liability or capital stock account. 

A debit may signify an increase in an asset account.

In ‘Bill Purchase’ the loan will be created for the full value of the draft and the interest will be recovered when the actual payment comes. For example, a ‘Sight draft’ is presented for which the loan is created for 100% of the draft value. The money is received after 7 days, and then the interest will be recovered for 7 days along with the principal amount.

The repayment of the loan by instalment to cover principal amount with interest is known as ‘Amortization’.

Payroll administrators must understand the function and proper usage of various payroll forms. Forms related to payroll include personal data forms, overtime or absence approval forms, expense reimbursement forms and time sheets.

1. Processing Payroll to generate Paycheck and Pay Stubs

2. Generating Tax reports and vouchers using which Taxes are deposited to Govt (Employee Tax).

3. Processing reports that are handed over to Accounting Dept.

4. Ensuring that the Deductions, Benefits, Acruals, Taxes and Salaries are accurate (

5. Posting the Journals to Finance

6. Processing Govt Reports and submitted to Govt

7. Entering interims (may also be done by HR in some Companies)

7. Year End Process to generate W2s