Question 1

This item would include explanations concerning the qualifications and responsibilities of each position shown on organization chart.The item is also supported by policies and procedures manuals that outline specific activities performed by each position.

Accepted Answer

A) Job profile 
B) Human resources listing 
C) Organization chart description 
D) Position description

Question 2

The policies and procedures that employees following in acquiring and maintaining human resources, capturing and maintaining employee data, paying employees for time worked, and recorded the related cash payroll liabilities and expenses are collectively referred to as:

Accepted Answer

A) Payroll processes 
B) Human resources 
C) Salary administration 
D) Administrative procedures

Question 3

Disposing of a fixed asset could include all of the following methods, except:

Accepted Answer

A) Throwing it away 
B) Sending it to another department 
C) Exchanging it for another asset 
D) Donating it to another party

Question 4

This record, prepared by the payroll department, is a complete listing of salary or wage detail for all employees for a given time:

Accepted Answer

A) Payroll journal 
B) General ledger 
C) Employee record 
D) Payroll register

Question 5

For each transaction cycle and each type of transaction, there are internal controls that help to minimize certain risk to the company.Using the terminology and framework developed in the text, describe the following for the fixed asset process.

Accepted Answer

The answer of For each transaction cycle and each type...

Question 6

Which of the following is not a part of adequate documents and records for fixed assets?

Accepted Answer

A) Fixed asset journal 
B) Fixed asset subsidiary ledger 
C) Purchase order 
D) Fixed asset tags

Question 7

The shortcomings of a spreadsheet-based system include all of the following, except:

Accepted Answer

A) The design of spreadsheets is very time consuming 
B) The abundance of fixed asset data 
C) It is difficult to apply varying depreciation policies within spreadsheets 
D) It is difficult to establish an audit trail with spreadsheets

Question 8

Which of the following questions would be least likely to appear on an internal control questionnaire regarding the initiation and execution of new property, plant, and equipment purchases?

Accepted Answer

A) Are requests for repairs approved by someone higher than the department initiating the request? 
B) Are prenumbered purchase orders used and accounted for? 
C) Are purchase requisitions reviewed for consideration of soliciting competitive bids? 
D) Is access to the assets restricted and monitored?

Question 9

Types of fraud that may occur in the payroll function includes all of the following, except:

Accepted Answer

A) Overstated hours 
B) Incorrectly computed tax withholdings 
C) False claims of sick leave 
D) Pay claims made by ghost employees

Question 10

Internal control problems would be likely to result if a company's payroll department supervisor was also responsible for:

Accepted Answer

A) Reviewing authorization forms for new employees 
B) Comparing the payroll register with the batch transmittal 
C) Authorizing changes in employee pay rates 
D) Hiring subordinates to work in the payroll department

Question 11

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

Accepted Answer

A) Timekeeper 
B) Paymaster 
C) Electronic time clock 
D) Badge readers

Question 12

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

Accepted Answer

A) Human Re 
B) Department Supervi 
C) Payroll Department Manager 
D) Paymaster

Question 13

Which of the following procedures would be most useful in determining the effectiveness of a company's internal controls regarding the existence or occurrence of payroll transactions?

Accepted Answer

A) Observe the segregation of duties concerning personnel responsibilities and payroll disbursement 
B) Inspect evidence of accounting for prenumbered payroll checks 
C) Recompute the payroll deductions for employee fringe benefits 
D) Verify the preparation of the monthly payroll account bank reconciliation

Question 14

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

Accepted Answer

A) Timing issues 
B) Stolen cash 
C) Fictitious employees 
D) Invalid or omitted paychecks

Question 15

The internal control process of computing and recording the gains/losses for all fixed asset disposals will minimize the risk of:

Accepted Answer

A) Omitted transactions 
B) Stolen goods 
C) Fraudulent acquisitions 
D) Invalid vendors

Question 16

The internal control process of requiring management approval of fixed asset changes prior to recording the transaction, will help to minimize the risk of:

Accepted Answer

A) Incorrect amounts 
B) Lost or stolen assets 
C) Duplicate transactions 
D) Omitted transactions

Question 17

There are many risks that may affect the payroll and fixed asset transactions.Which of the following is not one of those risks?

Accepted Answer

A) Recorded transactions may not be valid. 
B) Expenditure transactions may be recorded in the wrong account. 
C) Valid expenditures recorded properly by the wrong employee. 
D) Transactions may not be recorded in a timely manner.

Question 18

Assets to be included in the fixed asset pool would include all of the following, except:

Accepted Answer

A) Vehicles 
B) Furniture 
C) Office Supplies 
D) Real Estate

Question 19

This phase of the fixed asset processes relates to those required to maintain accurate and up-to-date records regarding all fixed assets throughout their useful lives.

Accepted Answer

A) Depreciation 
B) Acquisition 
C) Disposal 
D) Continuance

Question 20

Factors that indicate the need for internal controls over fixed assets processes include all of the following, except:

Accepted Answer

A) General nature of fixed assets makes the susceptible to theft because they are distributed throughout the business and are in the hands of many 
B) Large quantities of fixed assets 
C) High likelihood of obsolescence due to technological changes 
D) The high cost of assets

Exam 10: Expenditures Processes and Controlspayroll and Fixed Assets