Exam 10: Expenditures Processes and Controls Payroll and Fixed Assets

When accounting software is used to prepare the periodic payroll, which of the following items is necessary to input for each employee?

The internal control activity requiring the preparation of a bank reconciliation will minimize the risk of all of the following EXCEPT:

When a new asset is requested, and the cost is below a preestablished amount, it is necessary for specific authorization of the purchase.

Each of the following items would likely be found in an employee's personnel records related to the initial hiring, except:

Strong internal controls are just as important for small organizations with few employees paid once per month as it is for large organizations with numerous employees being paid weekly.

For any company, and any asset, the method of depreciation and the related estimates salvage value and useful life) are the same for financial statements and income taxes.

It is the responsibility of the payroll department to make certain that all time sheets represent actual time worked by currently active employees.

When an organization uses a separate checking account to handle payroll transactions, it is easier to account for the payroll transactions and to distinguish them from cash disbursements for other business purposes.

An electronic payroll time keeping device that collects time and attendance data when employees enter their time sheets is called:

This individual is responsible for distributing the signed paychecks on the designated pay day.

Corporate governance policies and procedures must be in place to ensure that funds are expended to benefit managers and employees.

Organizations should have written procedures in place to identify when the costs related to fixed assets are capitalized recorded to repair and maintenance expense).

When high-dollar fixed assets are purchased, there should be a strict approval process which would include three formal steps.Which of the following is not one of those steps?

Preparing payroll manually is extremely time consuming due to the process of extracting all these inputs from the records and performing the mathematical computations.

Many companies use a tracking system for their fixed assets that would include applying a fixed asset tag, number, or label to the asset.

Earnings management related to fixed assets would occur when reducing expenses by decreasing the useful life of the fixed assets.

It is common that personnel related expenses are one of the largest expenses reported on the company's income statement.

The payroll process starts when an employee is hired by the organization.

The internal control activity requiring that the manager approves payroll prior to signing paycheck is intended to minimize the risk of:

A company's internal controls policies may mandate the distribution of paychecks by an independent paymaster in order to determine that: