The primary concern in testing payroll-related liabilities is to make sure that:
A) accruals are properly valued.
B) there are no understated or omitted accruals.
C) the accruals are not overstated.
D) transactions are recorded in the proper period.

Question

Quizplus · Accepted Answer

The primary concern in testing payroll-related liabilities is to ensure that there are no understated or omitted accruals. This is because payroll-related liabilities are subject to various regulations, such as tax withholdings and employee benefits, and any understatement or omission could result in noncompliance with these regulations and possible legal and financial consequences. While it is important to ensure that accruals are properly valued and not overstated, preventing understated or omitted accruals is the primary concern. Ensuring that transactions are recorded in the proper period is also important but not the primary concern when testing payroll-related liabilities.

The Primary Concern in Testing Payroll-Related Liabilities Is to Make