Chapter 9-13, 16 Messier

Last Updated By jld348 on 03/31/2013
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It would be appropriate for the payroll department to be responsible for which of the following functions?

Answer:
a)  Approval of employee time records
b)  Preparation of periodic governmental reports as to employees' earnings and withholding taxes
c)  Maintenance of records of employment, discharges, and pay increases
d)  Distribution of paychecks to employees
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  • jld348
    Which of the following audit tests would most likely be used to test the occurrence assertion for payroll transactions?
    a)Trace a sample of time sheets to the payroll register
    b)Recompute the mathematical accuracy of a sample of payroll checks
    c)Trace a sample of payroll checks to the approved time sheet summary and the master employee list to verify validity
    d)Test a sample of time sheets for the presence of authorization
    c)Test a sample of time sheets for the presence of authorization
  • jld348
    Effective control activities over the payroll function may include
    a)Reconciliation of totals of totals on time cards with job reports by employees responsible for those specific jobs
    b)Verification of agreement of job times cards with employee clock card hours by a payroll department employee
    c)Preparation of payroll transaction journal entries by an employee who reports to the supervisor of the personnel department
    d)Custody of rate authorization records by the supervisor of the payroll department
    b)Custody of rate authorization records by the supervisor of the payroll department
  • jld348
    An auditor is most likely to perform substantive tests of details on payroll transactions and balances when
    a)cutoff tests indicate a substantial amount of accrued payroll expense
    b)The level of control risk relative to payroll transactions is set at low
    c)Substantive analytical procedures indicate unusual fluctuations in recurring payroll entries
    d)Accrued payroll expense consists primarily of unpaid commissions
    c)Accrued payroll expense consists primarily of unpaid commissions
  • jld348
    The objectives of internal control for an inventory management process are to provide assurance that transactions are properly authorized and recorded and that
    a)Independent internal verification of activity reports is established
    b)Transfers to the finished goods department are documented by a completed production report and a quality control report
    c)Production orders are prenumbered and signed by a supervisor
    d)Custody of work in process and finished goods is properly maintained
    d)Custody of work in process and finished goods is properly maintained
  • jld348
    Which of the following control activities would be most likely to assist in reducing the control risk related to the occurrence of inventory transactions?
    a)Inventory manager does not have ability to record inventory transactions
    b)Summary of the receiving reports is independently compared to the inventory status report
    c)Inventory is periodically reviewed for slow-moving or obsolete items, which may require a write-down
    d)Subsidiary ledgers are periodically reconciled with inventory control accounts
    a)Subsidiary ledgers are periodically reconciled with inventory control accounts
  • jld348
    Which of the following would most likely be an internal control activity designed to detect errors and fraud concerning the custody of inventory?
    a)Periodic reconciliation of work in process with job cost sheets.
    b)Segregation of functions between general accounting and cost accounting
    c)Independent comparisons of finished goods records with counts of goods on hand
    d)Approval of inventory journal entries by the storekeeper
    c)Approval of inventory journal entries by the storekeeper
  • jld348
    Independent internal verification of inventory (ie, proper segregation of duties) occurs when employees who
    a)Issue raw materials obtain materials requisitions for each issue and prepare daily totals of materials issued
    b)Compare records of goods on hand with physical quantities do not maintain the records or have custody of the inventory
    c)Obtain receipts for the transfer of completed work to finished goods prepare a completed production report
    d)Are independent of issuing production orders update records from completed job cost sheets and production cost reports on a timely basis
    b)Are independent of issuing production orders update records from completed job cost sheets and production cost reports on a timely basis
  • jld348
    An auditor's tests of controls over the issuance of raw materials to production would most likely include
    a)Reconciliation of raw materials and work-in-process perpetual inventory records to general ledger balances
    b)Inquiry of the custodian about the procedures followed when defective materials are received from vendors
    c)Observation that raw materials are stored in secure areas and that storeroom security is supervised by a responsible individual
    d)Examination of materials requisitions and reperformance of client controls designed to process and record issuances
    d)Examination of materials requisitions and reperformance of client controls designed to process and record issuances
  • jld348
    Which of the following internal control activities is most likely to address the completeness assertion for inventory?
    a)The work-in-process account is periodically reconciled with subsidiary records
    b)Employees responsible for custody of finished goods do not perform the receiving function
    c)Receiving reports are prenumbered and periodically reconciled.
    d)There is a separation of duties between payroll department and inventory accounting personnel.
    c)There is a separation of duties between payroll department and inventory accounting personnel.
  • jld348
    A client maintains perpetual inventory records in both quantities and dollars. If the level of control risk were set at high, an auditor would probably
    a)Insist that the client perform physical counts of inventory items several times during the year.
    b)Apply gross profit tests to ascertain the reasonableness of the physical counts
    c)Increase the extent of tests of controls of the inventory system
    d)Request that the client schedule the physical inventory count at the end of the year
    d)Request that the client schedule the physical inventory count at the end of the year
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Chapter 9 13  16 Messier
Chapter 9-13, 16 Messier
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Free Quiz Question From Chapter 9-13, 16 Messier
Question: It would be appropriate for the payroll department to be responsible for which of the following functions?
Answer:
Approval of employee time records
Preparation of periodic governmental reports as to employees' earnings and withholding taxes
Maintenance of records of employment, discharges, and pay increases
Distribution of paychecks to employees