Chap 10 Flashcards
Payroll processes
Acquiring and maintaining human resources.
Capturing and maintaining employee data.
Paying employees.
Recording cash and payroll liabilities and expenses.
Fixed asset processes
Purchasing property.
Capturing and maintaining relevant data about assets.
Paying for and recording the related assets.
Recording depreciation and other expenses.
Accounting for gains or losses.
Various risks in payroll and fixed asset processes
Recorded expenditures may not be valid.
Transactions may be recorded in the wrong amount.
Valid expenditure transactions may have been omitted.
Transactions may have been recorded in the wrong employee or vendor account.
Transactions may not have been recorded in a timely manner.
Transactions may not have been accumulated or transferred to the accounting records correctly.
Which of the following statements about payroll and fixed asset processes is true?
Both have only routine processes.
Both have only nonroutine processes.
Both have routine and nonroutine processes.
Payroll has only routine processes, while fixed asset has only nonroutine processes
Both have routine and nonroutine processes.
For a given pay period, the complete listing of paychecks for the pay period is a
payroll register.
payroll ledger.
payroll journal.
paymaster.
payroll register.
A payroll voucher
authorizes an employee paycheck to be written.
authorizes the transfer of cash from a main operating account to a payroll account.
authorizes the transfer of cash from a payroll account to a main operating account.
authorizes the paymaster to distribute paychecks.
authorizes the transfer of cash from a main operating account to a payroll account.
Common procedures associated with the payroll process:
Authorization of transactions Segregation of duties Adequate records and documents Security of assets and documents Independent checks and reconciliation Cost-benefit considerations
For proper segregation of duties, the department that should authorize new employees for payroll would be
payroll.
human resources.
cash disbursement.
general ledger.
human resources.
Internal control problems would be likely to result if a company’s payroll department supervisor was also responsible for
reviewing authorization forms for new employees.
comparing the payroll register with the batch transmittal data.
authorizing changes in employee pay rates.
hiring subordinates to work in the payroll department.
comparing the payroll register with the batch transmittal data.
Which of the following departments or positions most likely would approve changes in pay rates and deductions from employee salaries?
Human resources
Treasurer
Controller
Payroll
Human resources
Payroll requires
routine mathematical calculations and storing of a large volume of data regarding employees, deductions, vacation days, sick days, and other data.
IT and payroll
IT systems can include payroll and human resources software, automated timekeeping, Internet-based timekeeping, and electronic transfer of funds.
Fixed assets may include the following:
vehicles, office equipment and computers, machinery and production equipment, furniture, and real estate (such as land and buildings).
Fixed Asset Acquisitions
Initiated by user department. Large cash outlays sometimes required. Non-routine transactions that require specific authorization. Capital budget. Fixed asset subsidiary ledger.
Fixed Asset Continuance
Involves:
Updating cost data for improvements Updating estimated figures as needed Adjusting for periodic depreciation Keeping track of physical location of assets Depreciation schedule
