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

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

Describe an internal control procedure that would prevent an employee from punching the time clock for another, absent employee.

Payroll checks are typically drawn on

Erroneous data in the payroll system can corrupt WIP, employee records and the payroll register. What edit controls will minimize this risk?

List two types of authorization required in the Fixed Asset System.

All of the following are processed by the Fixed Asset System except

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

Fixed Asset Systems must keep track of the physical location of each asset to promote accountability.

Which transaction is not processed in the Fixed Asset System?

An important reconciliation in the payroll system is

What negative consequences can result from miscalculated depreciation?

Describe an internal control that would prevent the charging of depreciation expense to the maintenance department for a sweeper that is now located in and used by the engineering department.

Payroll uses time card data to do all of the following except

When fixed assets are received, the receiving clerk sends copies of the receiving report to the inventory control clerk and the AP clerk.

Depreciation

Timekeeping is part of the personnel function.

The payroll department performs all of the following except

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

The Golf Club Company makes custom golf clubs. The manufacturing supervisor interviews people who have specialized manufacturing skills, and he informs payroll when an employee is hired. The employees use a time clock to record the hours they work. The employees are also required to keep a record of the time they spend working on each order. The supervisor approves all time cards. The accountant analyzes the job tickets and prepares a labor distribution summary. Payroll prepares the payroll register and paychecks. The supervisor distributes the paychecks to the employees. Payroll informs cash disbursement of the funds required to cover the entire payroll amount. The cash disbursements clerk ensures that there are adequate funds in the company's regular checking account to cover the payroll. Describe at least three internal control weaknesses; for each weakness suggest an improvement to internal control.

The Fixed Asset System performs all of the following except