AC09302 Expenditure Cycle Part II Quiz

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The document discusses payroll processing procedures and fixed asset management. It covers topics like payroll activities, timekeeping, and internal controls.

The payroll processing cycle involves activities like obtaining pay rates, tracking hours worked, preparing paychecks, and disbursing payment. It needs to integrate with fixed asset management and cost accounting.

Time cards capture the time individual workers spend on each production job to track labor hours and costs.

Name: Score:

Section: Date:

EXPENDITURE CYCLE PART II


Payroll Processing and Fixed Asset Procedures

QUIZ

I. TRUE or FALSE. Indicate whether the statement is true or false. Write the
answer on the space provided.

_____1. Unlike general expenditure activities, payroll activities comprise a


relatively steady flow of purchasing and disbursing transactions.

_____2. The payroll department receives pay rate and hours-worked data from the
production department.

_____3. None of the employee paychecks is a negotiable instrument until the


payroll check is deposited to the imprest account.

_____4. Human Resource Management (HRM) system needs to provide real-time


access to personnel files for purposes of direct inquiries and recording
changes in employer status as they occur.

_____5. Pay rate information is obtained from the payroll master file.

_____6. The person responsible for preparing paychecks can add new records to
the payroll master file.

_____7. The payroll system must be designed to collect and integrate cost data
with other types of information in order to enable management to make
decisions regarding payroll processing efficiency and effectiveness,
employee performance, and employee morale, future work force staffing
needs.

_____8. Asset maintenance involves adjusting the fixed asset subsidiary account
balances as the assets, including land, depreciate over time with usage.

_____9. The depreciation of fixed assets used to manufacture products is treated


as an expense in the current period.
_____10. Compared to capital assets, inventories are more susceptible to theft and
misappropriation since they are widely distributed throughout the
organization.

_____11. In payroll access controls, the only asset of interest is cash which should
have restricted access either through locks and passwords or both.

_____12. Cost accounting receives information regarding the time spent on each job
from the personnel department.

_____13. Time cards capture the time that individual workers spend on each
production job.

_____14. The personnel department prepares and submits labor distribution summary
to the prepare payroll function.

_____15. The acquisition of a fixed asset is recorded when its accounting department
receives a receiving report and the cash disbursement voucher.

_____16. Disposal procedures are automatically input to the fixed asset system which
automatically removes the asset from the subsidiary ledger accounts,
adjusts the general ledger accounts, records any loss or gain, and prepares
a journal voucher to record the audit trail of the transaction.

_____17. Authorization controls should be informal and explicit.

_____18. Accounts payable department reviews and sign paychecks and forwards
them to a paymaster.

_____19. Payroll is well-suited for batch processing and non-sequential files.

_____20. Internal auditors should periodically verify location, condition, and the fair
value of the fixed asset records in the subsidiary ledger.

II. MULTIPLE CHOICE. Choose the one alternative that best completes the
statement or answers the question. Encircle the letter of your choice.

1. The nature of payroll processing creates the need for specialized procedures.
Which of the following does not justify that need?

a. Payroll procedures differ greatly among classes of employees.

b. Payroll activities are non-discrete events in which disbursements to


employees occur weekly, biweekly, or monthly.
c. Combining payroll and trade transactions can encourage payroll fraud.

d. All of the above justify the need for specialized procedures.

2. These capture the time that individual workers spend on each production job.

a. Time cards

b. Job tickets

c. Attendance files

d. Labor usage files

3. A clerk in payroll performs various tasks. Which of the following documents is not
involved or included in those tasks?

a. Payroll register

b. Employee payroll records

c. Paychecks

d. None of the above

4. A is an individual independent of the payroll process who is tasked to


distribute paychecks to employees.

a. Checkmaster

b. Payroll clerk

c. Paymaster

d. Accounts payable clerk

5. This opens the opportunity for a person to create a false liability to himself or an
agent, approve payment, and write the check. (Choose the best answer)

a. Inadequate supervision of the time-keeping process and failure of


reconciliation of the time cards with actual attendance

b. The payroll function has both asset custody and record-keeping


responsibility.

c. The key portions of the payroll transaction between accounts payable and
cash disbursement functions are inadequately segregated.
d. Improper access to accounting records

6. The audit trail for payroll involves different documents such as the general ledger
accounts. General ledger accounts includes

a. Payroll control

b. Employee records

c. Payroll register

d. A and C only

7. All of the following are sent to the general ledger function except

a. Labor distribution summary

b. Employee payroll records

c. Disbursement voucher

d. Journal voucher

8. Automation of the payroll system using batch processing does the following
except

a. Promotes accounting accuracy

b. Reduces check-writing errors

c. Enhances operational efficiency

d. Provides detailed record-keeping

9. Human Resource Management (HRM) system differs from the simple automated
system in three ways except

a. Direct access files are used for a data storage

b. Many processes are performed in real time

c. Payroll system runs periodically

d. Various departments transmit transactions to data processing via


terminals

10. The department responsible of entering job cost data to create a labor usage file
is the
a. Production department

b. Cost accounting department

c. Payroll department

d. Accounts payable department

11. After the payroll checks are prepared and signed, they are sent to the _____ for
review and reconciliation with the payroll register.

a. Treasurer

b. Internal auditor

c. External auditor

d. Accounts payable clerk

12. Which of the following pertains to the fixed asset system

a. The fixed asset system processes routine transactions for a wider group of
users in the organization.

b. Fixed asset transactions are unique; they require specific management


approval and implicit authorization procedures.

c. Fixed asset acquisitions are usually treated as an expense of the current


period.

d. Fixed asset accounting systems include cost allocation and matching


procedures.

13. The categories of tasks of a fixed asset system includes the following except

a. Asset acquisition

b. Asset supervision

c. Asset maintenance

d. Asset disposal

14. A record in the fixed asset subsidiary ledger specifies

a. The asset’s useful life and salvage value

b. Depreciation method used


c. Asset’s location in the organization

d. All of the above data

15. When the clerk deletes a record form the fixed asset subsidiary ledger, the
system automatically

a. Posts an adjusting entry to the fixed asset control account in the general
ledger

b. Records any loss or gain associated with the disposal

c. Updates the accumulated depreciation and book value fields in the


subsidiary records

d. Only a and b

16. A paymaster falls under what kind of payroll control

a. Transaction authorization

b. Independent verification

c. Supervision

d. A paymaster is not involved in payroll control.

17. How can a fixed asset system promote accountability?

a. Consolidating the fixed assets in a specific secure area

b. Minimizing the transfer of the fixed asset from one department to another

c. Monitoring the physical location of each fixed asset

d. Prohibiting strictly certain departments from the use of the fixed asset

18. Involves adjusting asset accounts to reflect the cost of physical improvements
that increase the asset’s value and extend its useful life.

a. Asset supervision

b. Asset acquisition

c. Asset maintenance

d. Asset disposal

19. A depreciation schedule does not


a. Show when and how much depreciation to record

b. Show when to stop taking depreciation on fully depreciated asset

c. Help in planning asset retirement and replacement

d. Depreciation schedule performs all of the above.

20. What function is responsible in the preparation of a single check for the entire
amount of the payroll?

a. Accounts payable function

b. Prepare payroll function

c. Cash disbursement function

d. General ledger function

21. Provides the verification of the overall process by reconciling the labor
distribution summary and the payroll disbursement voucher

a. Human resource department

b. Accounts payable department

c. General ledger department

d. Personnel department

22. The following transaction are processed in the fixed asset system except

a. Repair of an equipment

b. Purchase of raw materials

c. Sale of a company van

d. Purchase of a building

23. The personnel department prepares the

a. Pay rate and hours-worked data

b. Pay rate and withholding data

c. Pay rate data only

d. Hours-worked data only


24. A voucher packet consists

a. Voucher and payroll register

b. Voucher and cash register

c. Voucher and employee payroll records

d. Voucher and paychecks

25. The following are threats to HRM or payroll cycle (choose the exception)

a. Fines and civil suits

b. Inaccurate time data

c. Theft or fraudulent distribution of paychecks

d. Hiring of unqualified or larcenous employees

26. What is the relationship between skills and recruiting?

a. One-to-many

b. Many-to-one

c. One-to-one

d. Many-to-many

27. What is the relationship between the recruiting event and the job applicants?

a. One-to-many

b. Many-to-one

c. One-to-one

d. Many-to-many

28. Opportunities for using information technology in the disbursement of payroll


includes

a. Corporate intranets

b. Outsourcing to a payroll service bureau

c. Online terminals
d. Both B and C

29. It is a recurring set of business activities and related data processing operations
associated with effectively managing the employee work force

a. Recruitment

b. HRM/Payroll cycle

c. Job assignment

d. Hiring

30. The final activity in the payroll process involves

a. Payment of tax liability and voluntary deductions of each employee

b. Distribution of paychecks

c. Updating of tax rates and other withholdings

d. Updating payroll master file

ANSWER KEY

TRUE or FALSE 2) FALSE

3) TRUE

1) FALSE 4) FALSE
5) TRUE

6) FALSE MULTIPLE CHOICE

7) TRUE

8) FALSE 1) B

9) FALSE 2) B

10)FALSE 3) D

11)FALSE 4) C

12)FALSE 5) B

13)FALSE 6) A

14)FALSE 7) B

15)TRUE 8) C

16)FALSE 9) C

17)FALSE 10)B

18)FALSE 11)A

19)FALSE 12)D

20)TRUE 13)B

14)D

15)D

16)B

17)C

18)C

19)D

20)C

21)C

22)B
23)B 27)D

24)A 28)B

25)A 29)B

26)A 30)A

Prepared by:

Group Name:

One of the Boys

Group Members:

CABANA, John Mark

CARLOS, Monique

FIGUERREZ, Leizel Anne

GALAS, Rose Anne

SANTOS, Renier

TALACTAC, Abigaile

Section:

AC09302

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