Question 1

Most companies can justify the use of specialized asset management software programs instead of the spreadsheets or traditional manual systems for all of the following reasons, except:
A)The abundance of fixed asset data
B)The time-consuming and tedious requirements for tracking changes
C)The number of different methods of accounting for depreciation
D)The intricacy of the tax laws

Accepted Answer

The number of different methods of accounting for depreciation

Question 2

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

Accepted Answer

The high cost of assets

Question 3

A hiring decision normally occurs as the result of an interview or interviews and is documented on a signed letter and / or signed employment contract.

Accepted Answer

A hiring decision is typically documented on a signed letter and/or employment contract after an interview or interviews have taken place.

Question 4

Clues that a ghost employee may exist in the company would include all of the following, except:
A)Payroll register identifies paychecks without adequate tax withholdings
B)The personnel file contains no duplicate addresses
C)Payroll expenses are over budget
D)Paychecks were not claimed when the paymaster distributed them
TEST BANK - CHAPTER 10 - TRUE / FALSE

Accepted Answer

The personnel file contains no duplicate addresses

Question 5

An entity who receives a paycheck, but who does not actually work for the company is called:
A)Ghost employee
B)Shell employee
C)Abundant employee
D)Absent employee

Accepted Answer

Ghost employee

Question 6

Accounting for a fixed asset over the life of the asset would have features of non-routine transactions only.

Accepted Answer

Accounting for a fixed asset over the life of the asset involves routine transactions such as depreciation expense and accumulated depreciation, as well as non-routine transactions such as revaluations or impairment assessments.

Question 7

The internal control process of computing and recording the gains/losses for all fixed asset disposals will minimize the risk of:
A)Omitted transactions
B)Stolen goods
C)Fraudulent acquisitions
D)Invalid vendors

Accepted Answer

Omitted transactions

Question 8

The internal control process of requiring physical controls in place in areas where fixed assets are held, will help to minimize the risk of:
A)Incorrect amounts
B)Lost or stolen assets
C)Duplicate transactions
D)Omitted transactions

Accepted Answer

Lost or stolen assets

Question 9

A unique feature of the information contained in an individual personnel file is that it is accessed infrequently but is changed relatively frequently.

Accepted Answer

Personnel files are typically accessed infrequently and changed infrequently, as they contain stable information like employment history and personal details.

Question 10

The internal control process of requiring the check of the fixed asset subsidiary ledger and depreciation schedule for mathematical accuracy and agreement with authorized documentation, will help to minimize the risk of:
A)Incorrect amounts
B)Lost or stolen assets
C)Duplicate transactions
D)Omitted transactions

Accepted Answer

Incorrect amounts

Question 11

Routine transactions refer to common business transactions such as payroll and fixed asset transactions.

Accepted Answer

The answer of Routine transactions refer to common business transactions...

Question 12

There are a number of ways that frauds may be carried out to try to receive excess compensation.Which of the following is not one of those methods?
A)Exaggeration of hours worked
B)Falsification of overtime or holiday time worked, payable at a higher rate
C)Understatement of job related expenses
D)Falsification of sales in order to increase commission payouts

Accepted Answer

Understatement of job related expenses

Question 13

The payroll process starts when an employee is hired by the organization.

Accepted Answer

The payroll process typically starts when an employee is hired, as their information needs to be added to the payroll system and they need to be set up to receive payments.

Question 14

The control environment related to the fixed asset processes can be enhanced through the implementation of various access controls, such as:
A)Passwords
B)Number of employees who have access to the system
C)Limits on the number of computer workstations where information may be entered
D)All of the above

Accepted Answer

All of the above

Question 15

The hiring of employees is considered to be a routine process.

Accepted Answer

The hiring of employees is not considered a routine process as it involves various steps such as job analysis, recruitment, interviewing, and selection, which require careful consideration and decision-making.

Question 16

Members of management are not required to specifically approve an employee hired by the company when the new employee has been screened by an employment office.

Accepted Answer

Management approval is typically required for hiring decisions to ensure alignment with company policies and strategic goals, regardless of the screening process.

Question 17

It is not necessary to get specific authorization for each individual routine transactions.

Accepted Answer

Routine transactions that are authorized by the company's policies and procedures do not require specific authorization for each occurrence. However, significant or unusual transactions may require additional authorization.

Question 18

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

Accepted Answer

The abundance of fixed asset data

Question 19

Amounts withheld from an employee paycheck will ultimately be paid to another vendor.

Accepted Answer

Amounts withheld from an employee paycheck, such as taxes, will ultimately be paid to the federal or state government as required by law. Other withholdings, such as for retirement or health benefits, will be paid to the respective vendor administering those benefits.

Question 20

Most of the records found in an employee's personnel file are accounting related.

Accepted Answer

Personnel files typically contain records related to employment and performance, such as job applications, performance evaluations, disciplinary actions, and training records. Accounting related records would be found in payroll or financial records.

Quiz 10: Expenditures Processes and Controls Payroll and Fixed Assets

Most companies can justify the use of specialized asset management software programs instead of the spreadsheets or traditional manual systems for all of the following reasons, except:

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

A hiring decision normally occurs as the result of an interview or interviews and is documented on a signed letter and / or signed employment contract.

Clues that a ghost employee may exist in the company would include all of the following, except:

An entity who receives a paycheck, but who does not actually work for the company is called:

Accounting for a fixed asset over the life of the asset would have features of non-routine transactions only.

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

The internal control process of requiring physical controls in place in areas where fixed assets are held, will help to minimize the risk of:

A unique feature of the information contained in an individual personnel file is that it is accessed infrequently but is changed relatively frequently.

The internal control process of requiring the check of the fixed asset subsidiary ledger and depreciation schedule for mathematical accuracy and agreement with authorized documentation, will help to minimize the risk of: