Deck 13: The Human Resources Managementpayroll Cycle

Question 1

Which area provides information to the system about hiring,terminations,and pay rate changes?

A)payroll
B)timekeeping
C)purchasing
D)HRM

Answer 1

D

Question 2

Which activity below is not performed by the HRM?

A)compensation
B)training
C)discharge
D)recruitment and hiring

Answer 2

A

Question 3

Some companies have created a position called "director of intellectual assets." What is the objective of this position?

A)measurement and development of intellectual assets and human resources
B)implementation of a more integrated HRM/payroll system
C)improvement of the hiring and firing procedures in the company
D)All of the above are correct.

Answer 3

A

Question 4

Time cards are generally used for employees who are paid on a(n)

A)monthly basis.
B)overtime basis.
C)hourly basis.
D)production or piece-rate basis.

Question 5

In most companies the HRM/payroll cycle activities are accomplished by two separate systems.Which task below is typically not performed by an HRM system?

A)training
B)performance evaluation
C)compensation
D)recruiting and hiring of new employees

Question 6

For recording time spent on specific work projects,manufacturing companies usually use a

A)job time ticket.
B)time card.
C)time clock.
D)labor time card.

Question 7

Employee turnover will always occur and some experts believe it may even be desirable in an organization.Experts estimate that on average the costs associated with replacing an employee are about __________ that of the employee's annual salary.

A)one-quarter
B)one-half
C)one and one-half
D)twice

Question 8

Which category of employee below is least likely to use a time card or electronic time clock to track their hours?

A)employees who manufacture a product
B)accountants
C)attorneys
D)managers and professional staff

Question 9

Which of the following is most likely to be a daily activity in the HRM/Payroll system?

A)Approve payroll disbursement
B)Prepare paychecks
C)Sign payroll checks
D)Update HRM/Payroll database

Question 10

In the payroll system,checks are issued to

A)employees and to banks participating in direct deposit.
B)a separate payroll bank account.
C)government agencies.
D)All of the above are correct.

Question 11

The first step in the payroll process is to

A)calculate gross pay.
B)update the payroll master file.
C)input time card data.
D)print paychecks.

Question 12

Some stock analysts believe that a company's human resources may be worth several times the value of its tangible assets.However,the AIS typically does not account for or track such assets.Why is this the case?

A)Employees are not "owned" by the company,and may not be considered an asset.
B)Financial statements report on assets that have not yet been used by the organization.
C)The value of human resources is only acknowledged when used and is tracked as an expenditure and not an asset.
D)all of the above

Question 13

Regarding the use of incentives,commissions and bonuses in payroll,which of the following statements is false?

A)Using incentives,commissions,and bonuses requires linking the payroll system and the information systems of sales and other cycles in order to collect the data used to calculate bonuses.
B)Bonus/incentive schemes must be properly designed with realistic,attainable goals that can be objectively measured.
C)Poorly designed incentive schemes can result in undesirable behavior.
D)All of the above are true

Question 14

What is the payroll system's principal output?

A)hiring information
B)checks to employees
C)checks to government agencies
D)internal and external use reports

Question 15

The payroll master file is updated with

A)new hire and termination data.
B)changes in pay rates and discretionary withholdings.
C)changes in time card data.
D)A and B above are correct.

Question 16

Which of the following is not one of the major sources of input to the payroll system?

A)payroll changes
B)time and attendance data
C)checks for insurance and benefits
D)withholdings and deduction requests from employees

Question 17

Many companies use incentives and bonuses to motivate greater productivity and better quality work.An effective bonus/incentive system should incorporate realistic,attainable goals that can be objectively measured.What is not a desired result of an employee bonus/incentive system?

A)employees may recommend unnecessary services to customers in order to exceed set sales quotas and earn a bonus
B)employees may look for ways to improve service
C)employees may analyze their work environment and find ways to cut costs
D)employees may work harder and may be more motivated to exceed target goals to earn a bonus

Question 18

Given the four activities below,which of the HRM/payroll cycle activities occurs infrequently relative to the others?

A)updating of the payroll master file
B)updating information about tax rates and withholdings
C)validating each employee's time and attendance data
D)preparing payroll

Question 19

When a person quits or is terminated from a company,what should be done with the person's record in the payroll system?

A)It should be deleted immediately to prevent bogus paychecks from being issued.
B)It should be kept indefinitely.
C)It needs to be kept at least until the end of the current year.
D)There is no rule about the retention of payroll records.

Question 20

Payroll is one AIS application that is processed in __________ mode.

A)sequential
B)batch
C)real time
D)safe

Question 21

What step can be taken to reduce the distribution of fraudulent paychecks?

A)have internal audit investigate unclaimed paychecks
B)allow department managers to investigate unclaimed paychecks
C)immediately mark "void" across all unclaimed paychecks
D)match up all paychecks with time cards

Question 22

This organization provides payroll as well as other HRM services such as employee benefit design and administration.

A)Cashier
B)Payroll service bureau
C)Professional employer organization
D)Virtual private network

Question 23

Part of the calculation necessary to process a payroll involves summing payroll deductions and subtracting the total from an employee's gross pay to arrive at net pay.Payroll deductions fall into two broad categories.Which deduction below would not be considered a voluntary deduction?

A)disability insurance
B)pension plan contribution
C)union dues
D)social security taxes

Question 24

This organization maintains the payroll master file for each of its clients and performs the payroll process.

A)Cashier
B)Payroll service bureau
C)Professional employer organization
D)Virtual private network

Question 25

One good way to eliminate paper paychecks is to

A)pay in cash only.
B)pay with money orders.
C)use the direct deposit method to transfer funds into employee bank accounts.
D)use EFT.

Question 26

Which HR report is useful in planning future workforce needs and training programs?

A)payroll register
B)deduction register
C)skills inventory report
D)workforce inventory

Question 27

Which HR report is used in preparing labor-related reports for government agencies?

A)payroll register
B)deduction register
C)skills inventory
D)workforce inventory

Question 28

Which of the following deductions is not classified as a voluntary deduction?

A)pension plan contributions
B)social security withholdings
C)insurance premiums
D)deductions for a charity organization

Question 29

A manufacturing company is likely to use __________ to collect employee time data for payroll and job time.

A)badge readers
B)supervisor's entries
C)preprinted time cards
D)retina scanning

Question 30

These are used to transmit time and attendance data directly to the payroll processing system.

A)Badge readers
B)Electronic time clocks
C)Magnetic cards
D)None of the above

Question 31

Which of the following is not a benefit of using a payroll service bureau or a professional employer organization?

A)Freeing up of computer resources
B)Increased internal control
C)Reduced costs
D)Wider range of benefits

Question 32

Why is a separate payroll account used to clear payroll checks?

A)for internal control purposes to help limit any exposure to loss by the company
B)to make bank reconciliation easier
C)banks don't like to commingle payroll and expense checks
D)All of the above are correct.

Question 33

Which type of payroll report includes the details of the current paycheck and deductions as well as year-to-date totals for each category?

A)payroll register
B)deduction register
C)earnings statement
D)federal W-4 form

Question 34

Many companies offer their employees a "cafeteria" approach to voluntary benefits in which employees can pick and choose the benefits they want.This approach is normally called a(n)

A)elective plan.
B)menu options benefit plan.
C)flexible benefit plan.
D)pay-as-you-go plan.

Question 35

The fourth step in the payroll cycle is preparing payroll.Pay rate information is needed in order to complete this task.The pay rate information is accessed by the system from __________.

A)the employees' personnel files
B)the employee subsidiary ledger
C)the payroll master file
D)electronic time cards

Question 36

Which type of payroll report contains information such as the employees' gross pay,payroll deductions,and net pay in a multicolumn format?

A)payroll register
B)deduction register
C)employee earnings statement
D)federal W-4 form

Question 37

Which HR report is sent to each employee for use in preparing individual tax returns?

A)Form 941
B)Form W-2
C)Form W-4
D)Form 1099

Question 38

In a batch system,the payroll transaction file would contain

A)entries to add new hires.
B)time card data.
C)changes in tax rates.
D)All of the above are correct.

Question 39

Payroll deductions fall into the broad categories of __________ and __________.

A)payroll tax withholdings; voluntary deductions
B)unemployment; social security taxes
C)unemployment taxes; income taxes
D)voluntary deductions; income taxes

Question 40

Which type of payroll report lists the miscellaneous voluntary deductions for each employee?

A)payroll register
B)deduction register
C)earnings statement
D)federal W-4 form

Question 41

One step in the payroll cycle is the preparation of paychecks.In the next step the payroll register is sent to accounts payable for review.What is the following step in the process?

A)The paychecks are distributed to the employees.
B)A disbursement voucher is prepared to authorize the transfer of funds from the company's general account.
C)The payroll taxes are computed.
D)The earnings statements are printed.

Question 42

Direct deposit of employee paychecks is one way an organization can improve efficiency and reduce payroll-processing costs.Which statement regarding direct deposit is incorrect?

A)The cashier does not have to authorize the transfer of funds from the organization's checking account to a payroll checking account.
B)The cashier does not have to sign employee paychecks.
C)Employees who are part of a direct deposit program receive a copy of their paycheck indicating the amount deposited.
D)Employees who are part of a direct deposit program receive an employee earnings statement.

Question 43

The key to preventing unauthorized changes to the payroll master file is

A)hiring totally honest people to access and make changes to this file.
B)segregating duties between the preparation of paychecks and their distribution.
C)segregation of duties between the authorization of changes and the physical handling of paychecks.
D)having the controller closely review and then approve any changes to the master file.

Question 44

The document that lists each employee's gross pay,payroll deductions,and net pay in a multicolumn format is called

A)an employee earnings statement.
B)the payroll register.
C)a deduction register.
D)an employee time sheet summary.

Question 45

What is a potential threat to the activity of payroll processing?

A)hiring unqualified employees
B)poor system performance
C)violations of employment laws
D)unauthorized changes to the payroll master file

Question 46

What is the best control to reduce the risk of losing payroll data?

A)passwords
B)physical security controls
C)backup and disaster recovery procedures
D)encryption

Question 47

Theft or fraudulent distribution of payroll checks is a potential threat to the payroll processing activity.What is one control that can be implemented to help prevent paychecks being issued to a "phantom" or "ghost" employee?

A)the cashier should sign all payroll checks
B)prenumber all payroll checks
C)use an imprest account to clear payroll checks
D)paychecks should be physically distributed by someone who does not authorize or record payroll

Question 48

A "zero balance check" refers to which of the following control procedures?

A)batch totals
B)cross-footing the payroll register
C)a payroll clearing account
D)online edit control

Question 49

The results of an internal audit finds that there is a problem with inaccurate time data being entered into the payroll system.What is an applicable control that can help prevent this event from occurring in the future?

A)proper segregation of duties
B)automation of data collection
C)sound hiring procedures
D)review of appropriate performance metrics

Question 50

Which of the following controls is inappropriate for payroll check writing?

A)restrict access to blank payroll checks and documents
B)use of a payroll clearing account
C)someone independent of the payroll process should reconcile the payroll bank account
D)sequential numbering of paychecks and accounting for the numbers

Question 51

Which control would be most appropriate to address the problem of inaccurate payroll processing?

A)encryption
B)direct deposit
C)cross-footing of the payroll register
D)an imprest payroll checking account

Question 52

What is the purpose of a general ledger payroll clearing account?

A)to check the accuracy and completeness of payroll recording and its allocation to cost centers
B)to make the bank reconciliation easier
C)to make sure that all employees are paid correctly each week
D)to prevent the cashier from having complete control of the payroll cycle

Question 53

Which of the following is not a potential effect of inaccurate time data?

A)increased labor expenses
B)erroneous labor expense reports
C)damaged employee morale
D)inaccurate calculation of overhead costs

Question 54

Many demands are placed on the company's HRM/payroll system.For example,federal and state laws require employers to contribute a specified percentage of each employee's gross pay into certain funds.Such funds are used for

A)social security taxes.
B)flexible benefit plans.
C)federal and state unemployment compensation funds.
D)federal income taxes.

Question 55

One threat to the HRM/payroll cycle is the potential for violation of employment laws.This threat relates directly to the process or activity of

A)payroll processing.
B)general activities found in the cycle.
C)hiring and recruiting.
D)none of the above

Question 56

When using electronic documents,__________ increase the accuracy of data entry.

A)access controls
B)separation of duties
C)general controls
D)application controls

Question 57

Which one of the following tasks is most important in a firm's accounting information system?

A)Performance evaluation
B)Job assignment
C)Hiring and terminating employees
D)Compensation

Question 58

As the payroll system processes each payroll transaction,the system should also perform which activity listed below?

A)allocate labor costs to appropriate general ledger accounts
B)use cumulative totals generated from a payroll to create a summary journal entry to be posted to the general ledger
C)both A and B above
D)The HRM system should not perform either activity A or B.

Question 59

Some organizations outsource their payroll and/or HRM functions in an effort to reduce costs.A third party that maintains the payroll master file for each of its clients and processes payroll for them is called

A)a professional employer organization (PEO).
B)a payroll service bureau.
C)a value-added network.
D)an electronic data interface.

Question 60

The employer pays a portion of some payroll taxes and employee benefits.Both the employee and employer pay which benefit or tax listed below?

A)social security taxes
B)federal income taxes
C)state income taxes
D)none of the above

Question 61

Which of the following occurs nearest the start of the payroll cycle?

A)Update payroll master file
B)Disburse payroll taxes and miscellaneous deductions
C)Disburse payroll
D)Prepare payroll

Question 62

Which of the following is a control that addresses the threat of payroll processing errors?

A)Field checks
B)Batch totals
C)Segregation of duties
D)Sound hiring procedures

Question 63

Which one of the following is most likely to be positively correlated with employee morale?

A)Turnover rate
B)Profitability
C)Defect rate
D)Overhead

Question 64

The payroll cycle disburses checks to all of the following except

A)employees.
B)bank.
C)government.
D)vendors.

Question 65

Which of the following accounting cycles is most likely to be outsourced by a small or midsized business?

A)Revenue cycle
B)HR/Payroll cycle
C)Expenditure cycle
D)Production cycle

Question 66

Payroll processing efficiency can be increased by eliminating paper documents and replacing them with electronic recording devices.Which of the following documents would be likely to yield the greatest cost saving by this conversion?

A)Payroll register
B)Earnings statement
C)Deduction register
D)Time card

Question 67

Which of the following will limit a firm's potential loss exposure from paycheck forgery?

A)Segregation of check distribution from payroll duties
B)Prompt redeposit of unclaimed paychecks
C)A separate payroll bank account
D)Direct deposit of checks

Question 68

Which of the following is a control that addresses the threat of unauthorized changes to the payroll master file?

A)Field checks
B)Batch totals
C)Segregation of duties
D)Sound hiring procedures

Question 69

Which of the following forms is used to report a summary of all employees' wages and witholdings?

A)941
B)W-2
C)W-3
D)1099-Misc.

Question 70

Which of the following will contribute to the efficiency of a payroll system?

A)Segregation of check distribution from payroll duties
B)Prompt redeposit of unclaimed paychecks
C)A separate payroll bank account
D)Direct deposit of checks

Question 71

Which of the following occurs nearest the start of the payroll cycle?

A)Update payroll master file
B)Disburse payroll taxes and miscellaneous deductions
C)Disburse payroll
D)Prepare payroll

Question 72

The average annual middle-management salary at Folding Squid Technologies is $60,000.If the average turnover rate for middle management is ten employees per year,what is the approximate average annual cost of turnover?

A)$300,000
B)$600,000
C)$900,000
D)$1,200,000

Question 73

List the various ways used to compensate employees.

Question 74

Which of the following forms is used to report an employee's wages and witholdings?

A)941
B)W-2
C)W-3
D)1099-Misc.

Question 75

Which of the following is a control that addresses the threat of accidental entry of inaccurate time data into the payroll system?

A)Field checks
B)Batch totals
C)Segregation of duties
D)Sound hiring procedures

Question 76

Which of the following forms is used to report an employer's quarterly federal tax return?

A)941
B)W-2
C)W-3
D)1099-Misc.

Question 77

The Jaded Palate,a gourmet restaurant in Sunnyville,Alaska,uses outsourcing to reduce the costs of payroll processing and employee benefit administration.A business that provides these services is called a(an)

A)payroll clearing accountant.
B)payroll service bureau.
C)professional employer organization.
D)human resources manager.

Question 78

Which of the following is the most important control for reducing the opportunity for fraud involving paycheck forgery?

A)Segregation of check distribution from payroll duties
B)Prompt redeposit of unclaimed paychecks
C)A separate payroll bank account
D)Direct deposit of checks

Question 79

Define an HRM/payroll cycle.What are the basic activities in an HRM/payroll cycle?

Question 80

Which of the following forms is used to report an independent contractor's compensation?

A)941
B)W-2
C)W-3
D)1099-Misc.