Ch. 6 The Expenditure Cycle Part II: Payroll Processing and Fixed Assets Procedures MCQs

b. job ticket.

The document that captures the total amount of time that individual workers spend on each production job is called a
a. time card.
b. job ticket.
c. personnel action form.
d. labor distribution form.

a. the general ledger department compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable.

An important reconciliation in the payroll system is when
a. 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.

c. the accounts payable department verifies the accuracy of the payroll register before transfering payroll funds to the general checking account

Which internal control is not an important part of the payroll system?
a. supervisors verify the accuracy of employee time cards
b. paychecks are distributed by an independent paymaster
c. the accounts payable department verifies the accuracy of the payroll register before transfering payroll funds to the general checking account
d. the general ledger department reconciles the labor distribution summary and the payroll disbursement voucher

c. personnel

The department responsible for approving pay rate changes is
a. payroll
b. treasurer
c. personnel

c. paymaster

Which function should distribute paychecks?
a. personnel
b. timekeeping
c. paymaster
d. payroll

c. purchase of raw materials

Which transaction is not processed in the fixed asset system?
a. purchase of building
b. repair of equipment
c. purchase of raw materials
d. sale of company van

b. allocates the cost of the asset over its useful life.

Depreciation
a. is calculated by the department that uses the fixed asset.
b. allocates the cost of the asset over its useful life.
c. is recorded weekly.
d. results in book value approximating fair market value.

a. economic benefit of purchasing the asset.

Depreciation records include all of the following information about fixed assets EXCEPT the
a. economic benefit of purchasing the asset.
b. cost of the asset.
c. depreciation method being used.
d. location of the asset.

c. development of an economic order quantity model

Which control is not a part of the fixed asset system?
a. formal analysis of the purchase request
b. review of the assumptions used in the capital budgeting model
c. development of an economic order quantity model

d. maintaining a record of the fair market value of all fixed assets.

Objectives of the fixed asset system do NOT include
a. authorizing the acquisition of fixed assets.
b. recording depreciation expense.
c. computing gain and/or loss on the disposal of fixed assets.
d. maintaining a record of the fair market value of all fixed assets.

a. acquisitions are routine transactions requiring general authorization

Which of the following is NOT a characteristic of the fixed asset system?
a. acquisitions are routine transactions requiring general authorization
b. retirements are reported on an authorized disposal report form
c. acquisition cost is allocated over the expected life of the asset
d. transfer of fixed assets among departments is recorded in the fixed asset subsidiary ledger