Multiple Choice Questions and Answers
Essay Preview: Multiple Choice Questions and Answers
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MULTIPLE CHOICE QUESTIONS:1. The production employees prepare how many types of time records? A. One B. Two C. Three D. Four2. To minimize the opportunity for fraud, unclaimed salary checks should be:a. deposited in the bank special accountb. kept in the payroll departmentc. left with the employee’s supervisord. held for the employee in the personnel department3. No individual with access to time cards, payroll records, or checks should also be permitted access to:a. the computerb. job time ticketsc. personnel recordsd. the cancelled check file4. Which of the following statements is false?a. the payroll consists of one class of transactions.b. balance sheet accounts related to payroll are generally more significant than related transactions.c. Internal Controls over payroll are effective for most companies.d. Small companies usually have effective controls over payroll.5. A clerk in a payroll performs the following tasks except: A. Preparation of payroll register B. Preparation of employee paychecks C. Preparation of personnel action form D. Sending the paychecks to the distribute paycheck function6. To check the accuracy of hours worked, an auditor would ordinarily compare clock cards with:a. Personnel recordsb. Job time ticketsc. Labor variance reportsd. Time recorded in the payroll register.7. Which department should be authorized to add and delete employees from the payroll or change pay rates and deductions?a. The supervising departmentb The accounting departmentc. The human resources department d. The treasurer’s department8. An important reconciliation in the payroll system isa. The general ledger department compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable.b. The personnel department compares the number of employees authorized to receive a paycheck to the number of paychecks prepared.c. the production department compares the number of hours reported on job tickets to the number of hours reported on time cards.d. the payroll department compares the labor distribution summary to the hours reported on time cards.9. An auditor who is testing EDP controls in a payroll system would most likely use test data that contain conditions such asa. Deductions not authorized by employees.b. Overtime not approved by supervisors.c. Time tickets with invalid job numbers.d. Payroll checks with unauthorized signatures 10. Which of the following is not one of the major sources of input to the payroll system? a. payroll rate changesb. time and attendance datac. checks to insurance and benefits providers d. withholdings and deduction requests from employees
11. Matthews corp. has changed from a system of recording time worked on clock cards to a computerized payroll system in which employee’s record time in and out with magnetic cards. The EDP system automatically updates all payroll records. Because of this changea. A generalized computer audit program must be used.b. Part of the audit trail is altered.c. The potential for payroll related fraud is diminished.d. Transactions must be processed in batches.12. If a control total were to be computed on each of the following data items, which would be best be identified as a hash total for a payroll EDP application?a. Hours worked.b. Total debits and total creditsc. Net payd. Department numbers.13. In a computerized payroll system environment, an auditor would be least likely to use test data to test controls related toa. Missing employee numbers.b. Proper approval of overtime by supervisorsc. Time tickets with invalid job numbersd. Agreement of hours per clock cards with ours on time tickets.14. An auditor must likely would introduce test data into a computerized payroll system to test controls related to thea. Existence of unclaimed payroll checks held by supervisorsb. Early cashing of payroll checks by employees.c. Discover of invalid employee I.D. numbersd. Proper approval of overtime by supervisor15. Effective accounting control over the payroll should include procedures that segregate the duties of making salary payments to employees and a. Controlling unemployment insurance claims. b. Maintaining employee personal records. c. approving employee fringe benefitd. hiring new employees16. It would be appropriate for the payroll accounting department to be responsible for which of the following functions?a. Approval of employee time records.b. Maintenance of records of employment, discharge, and pay increases.c. Preparation of periodic government reports as to employee’s earnings and withholding taxes.d. Answer not given17. If a control total were to be computed on each of the following data items, which would best be identified as a hash total for a payroll EDP application?a. Gross payb. Hours workedc. Department numberd. Number of employees18. Hitech, Inc. has changed from a conventional to a computerized payroll clock card system. Factory employees now record time in and out with magnetic cards and the computer system automatically updates all payroll records. Because of this changea. The auditor must audit through the computer.b. Internal control has improved.c. Part of the audit trail has been lostd. The potential for payroll related fraud has been diminished.19. In designing a payroll system, it is known that no individuals paycheck can amount to more than $300 for a single week. As a result, the payroll program has been written to bypass writing a check and will print out an error message if any payroll calculation results in more than $300. This type of control is called