Exam 13: Payroll and Production Processes

Which of the following is most likely to approve changes in pay rates and deductions from employee salaries?

Small Corporation uses a Wages Clearing Account for its payroll disbursements.At the end of February,a reasonably large debit balance remained in this account.What is the most likely reason?

The payroll register is the primary original record for payroll accounting.

The payroll cycle starts with keeping track of attendance and ends with payment to the employee.

Reconciling the open production cost reports to the work-in-process inventory control account is a procedure designed to test the control objective of ________.

It is permissible for accounting personnel to authorize production orders since they do not have custody of the assets.

An auditor is most likely to assess control risk at maximum if the payroll department supervisor is responsible for ________.

Which of the following procedures carried out by the personnel department best reduces the risk of payroll fraud and represents an appropriate responsibility for the department?

Selecting a sample of payroll summaries and vouching the details to time records is a procedure designed to test the control objective of ________.

A payroll "clearing account" is a temporary account that holds payroll transactions until final accounting entries are prepared.

Selecting a sample of job orders from the job cost summary and matching them to bills of material and the schedule of production labour requirements is a procedure designed to test the control objective of ________.

Which of the following accounts is not considered in the production cycle?

Recalculating all costs entered on a sample of open and closed job cost reports is a test of the accuracy objective.

Which of the following is NOT a major risk in the payroll cycle?

Finished goods inventory is low in inherent risk since production is so well understood.

A bill of materials is associated with which duty?

Most of the transactions in the production cycle are cost accounting allocations,unit cost determinations,and standard cost calculations.

The purpose of segregating the duties of hiring personnel and distributing payroll cheques is to separate the ________.

If controls over production accounting are found to be strong,an auditor can plan to do less testing over ________.

To best ensure that employees are paid authorized rates,the auditor should trace wage rates from the ________.