Exam 10: Expenditures Processes and Controls Payroll and Fixed Assets

Because of the infrequency of payroll processing and the sequential nature of the payroll process, many companies find that real-time processing is well-suited for payroll activities.

The fixed assets owned by a company are considered to be long-term because:

A method of earnings management is to misclassify capitalized costs as repair and maintenance expenses.

Accounting for fixed assets requires the use of estimates - specifically the cost and the salvage value.

Amounts withheld from an employee paycheck will ultimately be paid to another vendor.

This type of transaction is one that a business encounters on a regular, recurring basis.The volume of the transactions is so large that transactions and the related accounting activities become second nature to the employees responsible for handling them.Specific authorization for each of these transactions is not necessary.The type of transaction referred to is:

In the case of high-dollar assets, there should be a strict approval process that requires the authorization of top management or the initiation of the capital budgeting procedures.

The internal control process of requiring an independent paymaster, will help to minimize the risk of:

Accounting software is available to assist with payroll but it is not very efficient because of all the changes that occur to all payroll variables during the period.

The internal control process of requiring the payroll register to be reconciled with the time sheets, will help to minimize the risk of:

Routine transactions refer to common business transactions such as payroll and fixed asset transactions.

Activities involved with the fixed assets disposal phase of the fixed assets processes include all of the following, except:

Although there is no direct benefit, in terms of cash received, when a fraudster engages in earnings management, it is still unethical because it results in the falsification of the company's financial statements.

It is necessary for employees to maintain adequate records of the hours worked and the projects worked on.The record of hours worked by an employee for a specific payroll period is reported on a document called:

The use of estimates when accounting for fixed assets requires that the estimates may need to be changed as time passes and new information is discovered.

The record detailing the amounts and timing of depreciation for all fixed asset categories, except land and any construction-in-progress accounts, is called:

It is not necessary to get specific authorization for each individual routine transactions.

For a given pay period, the complete listing of paychecks for the pay period is a:

An entity who receives a paycheck, but who does not actually work for the company is called:

The payroll process is initiated when: