Comprehensive and Detailed Explanation:
Payroll liabilities (taxes, deductions, and withholdings) must be reconciled regularly to prevent errors and ensure compliance.
Best practice is monthly reconciliation (Option B) to ensure:
Payroll taxes match general ledger accounts.
Deposits are made on time to avoid IRS penalties.
Payroll liability accounts are balanced before quarterly tax filings.
Option A (Weekly) is impractical unless payroll runs very frequently.
Option C (Quarterly) and Option D (Yearly) are too infrequent and may result in tax errors or compliance issues.
Reference:
Payroll.org - Payroll Tax Liability Reconciliation Best Practices
IRS - Payroll Tax Deposit and Reporting Compliance