A payroll "clearing account" is a temporary account that holds payroll transactions until final accounting entries are prepared.

Question

Quizplus · Accepted Answer

A payroll clearing account is indeed a temporary account that holds payroll transactions until final accounting entries are prepared, which means that it is used for intermediate accounting purposes. Once final entries are prepared, the transactions are then transferred to the appropriate accounts in the general ledger.

A Payroll "Clearing Account" Is a Temporary Account That Holds