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

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Question 51

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Accounts payable

A) signs paychecks
B) prepares the payroll voucher
C) reconciles time cards and employee records
D) distributes paychecks to employees

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Question 52

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List four types of data that appear on a depreciation schedule.

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item description, depreciation...

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Question 53

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In a manufacturing firm, employees typically fill out two different documents regarding their time worked. What are they? Why are there two?

Which of the following uses fingerprint or hand-vein scan technology to produce the time and attendance file?

The payroll department is responsible for both updating the employee records and writing paychecks.

A control technique that can reduce the risk of a terminated employee being paid is

The payroll department performs all of the following except

Asset maintenance involves only the recording of depreciation charges. Physical improvements are always expensed.

Which of the following is popular among businesses with employees in the field who travel between clients and companies with foreign-based employees?

The Baccus Corp. manufactures medical equipment. This is a capital intensive industry and investments in fixed assets exceed $5 million a year. The minimum cost for production equipment is $75,000. When supervisors want new production machinery, they contact the plant manager. The plant manager approves or denies the request based on discussions with the production supervisor, the repair and maintenance supervisor, and the quality control supervisor. A purchase order is prepared by the purchasing department and sent to one of the three major suppliers of production machinery for medical equipment. The equipment is delivered immediately to the production floor and put into service. At the end of the month, the production supervisor informs the general ledger clerk about the receipt of the machinery. The general ledger clerk establishes an asset record for the machine. At the end of the year, the general ledger clerk computes straight-line depreciation based on a 10-year life with a 10 percent salvage value. Depreciation expense is recorded as a direct reduction of the asset cost. The repair department performs routine maintenance on all of the production equipment. Occasionally the repair department rebuilds a machine to extend its useful life. All of the costs associated with the repair department are charged to manufacturing overhead. When a machine becomes obsolete, production employees move it to a corner of the factory floor and break it down so that parts can be used in other machines. Production employees routinely remove parts for personal use. Some smaller machines have disappeared completely from the factory floor. The general ledger clerk takes a physical inventory every three years. About 75 percent of the fixed assets can be located and identified. Other assets have serial numbers that are inaccessible, so the item cannot be matched to a fixed asset record. Some fixed asset records cannot be traced to an actual item. Several machines that have been scrapped and are being used for spare parts were matched to fixed asset records. At the last inventory, the general ledger clerk did not make any adjustments to the fixed asset records explaining that 75 percent accuracy in the fixed asset physical inventory was excellent. Describe five internal control weaknesses and explain how to correct them.

Asset disposal

Why would an organization require the paymaster to deliver all unclaimed paychecks to the internal audit department?

Which of the following works through wallets, purses and card holders?

The Fixed Asset System is similar to the expenditure cycle except