Question 1

The payroll department is responsible for both updating the employee records and writing paychecks.

Accepted Answer

A) True 
 B)False

Question 2

The Baccus Corp.manufactures medical equipment.This is a capital-intensive industry and investments in fixed assets exceed $5 million a year.The minimum cost for production equipment is $75,000.When supervisors want new production machinery,they contact the plant manager.The plant manager approves or denies the request based on discussions with the production supervisor,the repair and maintenance supervisor,and the quality control supervisor.
A purchase order is prepared by the purchasing department and sent to one of the three major suppliers of production machinery for medical equipment.The equipment is delivered immediately to the production floor and put into service.At the end of the month,the production supervisor informs the general ledger clerk about the receipt of the machinery.The general ledger clerk establishes an asset record for the machine.At the end of the year,the general ledger clerk computes straight-line depreciation based on a 10-year life with a 10 percent salvage value.Depreciation expense is recorded as a direct reduction of the asset cost.
The repair department performs routine maintenance on all of the production equipment.Occasionally the repair department rebuilds a machine to extend its useful life.All of the costs associated with the repair department are charged to manufacturing overhead.When a machine becomes obsolete,production employees move it to a corner of the factory floor and break it down so that parts can be used in other machines.Production employees routinely remove parts for personal use.Some smaller machines have disappeared completely from the factory floor.
The general ledger clerk takes a physical inventory every three years.About 75 percent of the fixed assets can be located and identified.Other assets have serial numbers that are inaccessible,so the item cannot be matched to a fixed asset record.Some fixed asset records cannot be traced to an actual item.Several machines that have been scrapped and are being used for spare parts were matched to fixed asset records.At the last inventory,the general ledger clerk did not make any adjustments to the fixed asset records,explaining that 75 percent accuracy in the fixed asset physical inventory was excellent.
Describe five internal control weaknesses and explain how to correct them.

Accepted Answer

Weakness: There is no written documentat

Question 3

An important reconciliation in the payroll system is

Accepted Answer

A) general ledger compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable 
B) personnel compare the number of employees authorized to receive a paycheck to the number of paychecks prepared 
C) production compares the number of hours reported on job tickets to the number of hours reported on time cards 
D) payroll compares the labor distribution summary to the hours reported on time cards 
A) general ledger compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable 
B) personnel compare the number of employees authorized to receive a paycheck to the number of paychecks prepared 
C) production compares the number of hours reported on job tickets to the number of hours reported on time cards 
D) payroll compares the labor distribution summary to the hours reported on time cards

Question 4

Describe three process controls that pertain to payroll application logic.

Accepted Answer

1.Error messages.Any mismatch when posti

Question 5

Discuss outsourcing the payroll function.What are the advantages and risks?

Accepted Answer

Many organizations outsource their payro

Question 6

Explain the purpose of each of the following documents used in the payroll system:
the personnel action form,the job ticket,the time card.

Accepted Answer

The personnel action form is a document

Question 7

Which of the following uses fingerprint or hand-vein scan technology to produce the time and attendance file?

Accepted Answer

A) Biometric time clocks 
B) Magnetic swipe ID cards 
C) Mobile remote devices 
D) Proximity cards 
A) Biometric time clocks 
B) Magnetic swipe ID cards 
C) Mobile remote devices 
D) Proximity cards

Question 8

Which of the following works like a credit card with the time clock?

Accepted Answer

A) Biometric time clocks 
B) Magnetic swipe ID cards 
C) Mobile remote devices 
D) Proximity cards 
A) Biometric time clocks 
B) Magnetic swipe ID cards 
C) Mobile remote devices 
D) Proximity cards

Question 9

When fixed assets are received,the receiving clerk sends copies of the receiving report to the inventory control clerk and the AP clerk.

Accepted Answer

A) True 
 B)False

Question 10

Depreciation records include all of the following information about fixed assets except

Accepted Answer

A) the economic benefit of purchasing the asset 
B) the cost of the asset 
C) the depreciation method being used 
D) the location of the asset 
A) the economic benefit of purchasing the asset 
B) the cost of the asset 
C) the depreciation method being used 
D) the location of the asset

Question 11

The paymaster distributes paychecks to work center supervisors.

Accepted Answer

A) True 
 B)False

Question 12

Depreciation

Accepted Answer

A) is calculated by the department that uses the fixed asset 
B) allocates the cost of the asset over its useful life 
C) is recorded weekly 
D) results in book value approximating fair market value 
A) is calculated by the department that uses the fixed asset 
B) allocates the cost of the asset over its useful life 
C) is recorded weekly 
D) results in book value approximating fair market value

Question 13

In the payroll subsystem,which function should distribute paychecks?

Accepted Answer

A) personnel 
B) timekeeping 
C) paymaster 
D) payroll 
A) personnel 
B) timekeeping 
C) paymaster 
D) payroll

Question 14

Describe an internal control procedure that would prevent a supervisor from stealing the unclaimed paychecks of employees who have been terminated.

Accepted Answer

This type of fraud can be reduced or eli

Question 15

Why would an organization require the paymaster to deliver all unclaimed paychecks to the internal audit department?

Accepted Answer

A) to detect a "phantom employee" for whom a check was produced 
B) to prevent an absent employee's check from being lost 
C) to avoid paying absent employees for payday 
D) to prevent the paymaster from cashing unclaimed checks 
A) to detect a "phantom employee" for whom a check was produced 
B) to prevent an absent employee's check from being lost 
C) to avoid paying absent employees for payday 
D) to prevent the paymaster from cashing unclaimed checks

Question 16

Which department is responsible for approving changes in pay rates for employees?

Accepted Answer

A) payroll 
B) treasurer 
C) personnel 
D) cash disbursements 
A) payroll 
B) treasurer 
C) personnel 
D) cash disbursements

Question 17

The document that captures the total amount of time that individual workers spend on each production job is called a

Accepted Answer

A) time card 
B) job ticket 
C) personnel action form 
D) labor distribution form 
A) time card 
B) job ticket 
C) personnel action form 
D) labor distribution form

Question 18

Inventory control authorizes fixed asset purchases with a purchase requisition.

Accepted Answer

A) True 
 B)False

Question 19

Accounting conventions and IRS rules sometime specify the depreciation parameters to be used.

Accepted Answer

A) True 
 B)False

Question 20

Erroneous data in the payroll system can corrupt WIP,employee records,and the payroll register.What edit controls will minimize this risk?

Accepted Answer

1.Controls including checks for missing

The payroll department is responsible for both updating the employee records and writing paychecks.

An important reconciliation in the payroll system is

Describe three process controls that pertain to payroll application logic.

Discuss outsourcing the payroll function.What are the advantages and risks?

Explain the purpose of each of the following documents used in the payroll system: the personnel action form,the job ticket,the time card.

Which of the following uses fingerprint or hand-vein scan technology to produce the time and attendance file?

Which of the following works like a credit card with the time clock?

When fixed assets are received,the receiving clerk sends copies of the receiving report to the inventory control clerk and the AP clerk.

Depreciation records include all of the following information about fixed assets except

The paymaster distributes paychecks to work center supervisors.

Depreciation

In the payroll subsystem,which function should distribute paychecks?

Describe an internal control procedure that would prevent a supervisor from stealing the unclaimed paychecks of employees who have been terminated.

Why would an organization require the paymaster to deliver all unclaimed paychecks to the internal audit department?

Which department is responsible for approving changes in pay rates for employees?

The document that captures the total amount of time that individual workers spend on each production job is called a

Inventory control authorizes fixed asset purchases with a purchase requisition.

Accounting conventions and IRS rules sometime specify the depreciation parameters to be used.

Erroneous data in the payroll system can corrupt WIP,employee records,and the payroll register.What edit controls will minimize this risk?

The Information System: an Accountants Perspective

Introduction to Transaction Processing

Ethics,fraud,and Internal Control

The Revenue Cycle

The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

The Conversion Cycle

Financial Reporting,and Management Reporting Systems

Database Management Systems

The Rea Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Auditing It Controls Part I: Sarbanes-Oxley and It Governance

Auditing It Controls Part II: Security and Access

Auditing It Controls Part III: Systems Development, program Changes, and Application Auditing

Filters

Exam 6: The Expenditure Cycle Part II: Payroll Processing and Fixed Asset Procedures

The payroll department is responsible for both updating the employee records and writing paychecks.

An important reconciliation in the payroll system is

Describe three process controls that pertain to payroll application logic.

Discuss outsourcing the payroll function.What are the advantages and risks?

Explain the purpose of each of the following documents used in the payroll system: the personnel action form,the job ticket,the time card.

Which of the following uses fingerprint or hand-vein scan technology to produce the time and attendance file?

Which of the following works like a credit card with the time clock?

When fixed assets are received,the receiving clerk sends copies of the receiving report to the inventory control clerk and the AP clerk.

Depreciation records include all of the following information about fixed assets except

The paymaster distributes paychecks to work center supervisors.

Depreciation

In the payroll subsystem,which function should distribute paychecks?

Describe an internal control procedure that would prevent a supervisor from stealing the unclaimed paychecks of employees who have been terminated.

Why would an organization require the paymaster to deliver all unclaimed paychecks to the internal audit department?

Which department is responsible for approving changes in pay rates for employees?

The document that captures the total amount of time that individual workers spend on each production job is called a

Inventory control authorizes fixed asset purchases with a purchase requisition.

Accounting conventions and IRS rules sometime specify the depreciation parameters to be used.

Erroneous data in the payroll system can corrupt WIP,employee records,and the payroll register.What edit controls will minimize this risk?

The Information System: an Accountants Perspective

Introduction to Transaction Processing

Ethics,fraud,and Internal Control

The Revenue Cycle

The Expenditure Cycle Part I: Purchases and Cash Disbursements Procedures

The Conversion Cycle

Financial Reporting,and Management Reporting Systems

Database Management Systems

The Rea Approach to Business Process Modeling

Enterprise Resource Planning Systems

Electronic Commerce Systems

Managing the Systems Development Life Cycle

Auditing It Controls Part I: Sarbanes-Oxley and It Governance

Auditing It Controls Part II: Security and Access

Auditing It Controls Part III: Systems Development, program Changes, and Application Auditing

Filters