Question 1

Which of the following situations represents a serious control weakness?

Accepted Answer

A)  Timekeeping is independent of the payroll department. 
B)  Paychecks are distributed by the employees' immediate supervisor. 
C)  Time cards are reconciled with job tickets. 
D)  Personnel is responsible for updating employee records,including creation of records for new hires. 
A)  Timekeeping is independent of the payroll department. 
B)  Paychecks are distributed by the employees' immediate supervisor. 
C)  Time cards are reconciled with job tickets. 
D)  Personnel is responsible for updating employee records,including creation of records for new hires.

Question 2

Describe an internal control that would prevent the payment of insurance premiums on an automobile that is no longer owned by the company.

Accepted Answer

Perform an annual physical inv

Question 3

Why should employee paychecks be drawn against a special checking account?

Accepted Answer

A separate imprest account is establishe

Question 4

Which documents prompt the fixed asset department to create a fixed asset record?

Accepted Answer

the receiv

Question 5

Because a time clock is used,no supervision is required when employees enter and leave the work place.

Accepted Answer

A) True 
 B)False

Question 6

Time cards capture the total time an individual worker spends on each production job.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is not a characteristic of the Fixed Asset System?

Accepted Answer

A)  Acquisitions are routine transactions requiring general authorization. 
B)  Retirements are reported on an authorized disposal report form. 
C)  Acquisition cost is allocated over the expected life of the asset. 
D)  Transfer of fixed assets among departments is recorded in the fixed asset subsidiary ledger. 
A)  Acquisitions are routine transactions requiring general authorization. 
B)  Retirements are reported on an authorized disposal report form. 
C)  Acquisition cost is allocated over the expected life of the asset. 
D)  Transfer of fixed assets among departments is recorded in the fixed asset subsidiary ledger.

Question 8

The fixed asset disposal report authorizes the user department to dispose of a fixed asset.

Accepted Answer

A) True 
 B)False

Question 9

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 10

Personnel action forms are used to do all of the following except

Accepted Answer

A)  activate new employees 
B)  terminate employees 
C)  record hours worked 
D)  change pay rates 
A)  activate new employees 
B)  terminate employees 
C)  record hours worked 
D)  change pay rates

Question 11

Describe an internal control that would prevent the acquisition of office equipment which is not needed by the firm.

Accepted Answer

A higher organizational level

Question 12

The paymaster distributes paychecks to work center supervisors.

Accepted Answer

A) True 
 B)False

Question 13

The payroll department performs all of the following except

Accepted Answer

A)  prepares the payroll register 
B)  distributes paychecks 
C)  updates employee payroll records 
D)  prepares paychecks 
A)  prepares the payroll register 
B)  distributes paychecks 
C)  updates employee payroll records 
D)  prepares paychecks

Question 14

Describe several technologies developed for producing the time and attendance fil in a modern business with telecommuting employees working from multiple locations.

Accepted Answer

Biometric time clocks verify employees'

Question 15

Which department authorizes changes to employee pay rates?

Accepted Answer

The personnel depart

Question 16

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 17

Payroll processing can be automated easily because accounting for payroll is very simple.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Three major tasks are handled by the Fixed Asset System.What is the purpose of each? What special control issues affect each?

Accepted Answer

Asset acquisition handles the steps lead

Question 20

Which of the following works through wallets,purses and card holders?

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

Which of the following situations represents a serious control weakness?

Describe an internal control that would prevent the payment of insurance premiums on an automobile that is no longer owned by the company.

Why should employee paychecks be drawn against a special checking account?

Which documents prompt the fixed asset department to create a fixed asset record?

Because a time clock is used,no supervision is required when employees enter and leave the work place.

Time cards capture the total time an individual worker spends on each production job.

Which of the following is not a characteristic of the Fixed Asset System?

The fixed asset disposal report authorizes the user department to dispose of a fixed asset.

Personnel action forms are used to do all of the following except

Describe an internal control that would prevent the acquisition of office equipment which is not needed by the firm.

The paymaster distributes paychecks to work center supervisors.

The payroll department performs all of the following except

Describe several technologies developed for producing the time and attendance fil in a modern business with telecommuting employees working from multiple locations.

Which department authorizes changes to employee pay rates?

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

Payroll processing can be automated easily because accounting for payroll is very simple.

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

Three major tasks are handled by the Fixed Asset System.What is the purpose of each? What special control issues affect each?

Which of the following works through wallets,purses and card holders?

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

General Ledger,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

Construct,deliver,and Maintain Systems Projects

IT Controls Part I: Sarbanes-Oxley and It Governance

IT Controls Part II: Security and Access

IT Controls Part III: Systems Development, program Changes, and Application Controls

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

Which of the following situations represents a serious control weakness?

Describe an internal control that would prevent the payment of insurance premiums on an automobile that is no longer owned by the company.

Why should employee paychecks be drawn against a special checking account?

Which documents prompt the fixed asset department to create a fixed asset record?

Because a time clock is used,no supervision is required when employees enter and leave the work place.

Time cards capture the total time an individual worker spends on each production job.

Which of the following is not a characteristic of the Fixed Asset System?

The fixed asset disposal report authorizes the user department to dispose of a fixed asset.

Personnel action forms are used to do all of the following except

Describe an internal control that would prevent the acquisition of office equipment which is not needed by the firm.

The paymaster distributes paychecks to work center supervisors.

The payroll department performs all of the following except

Describe several technologies developed for producing the time and attendance fil in a modern business with telecommuting employees working from multiple locations.

Which department authorizes changes to employee pay rates?

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

Payroll processing can be automated easily because accounting for payroll is very simple.

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

Three major tasks are handled by the Fixed Asset System.What is the purpose of each? What special control issues affect each?

Which of the following works through wallets,purses and card holders?

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

General Ledger,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

Construct,deliver,and Maintain Systems Projects

IT Controls Part I: Sarbanes-Oxley and It Governance

IT Controls Part II: Security and Access

IT Controls Part III: Systems Development, program Changes, and Application Controls

Filters