Question 1

Because of the cycle's pervasive nature, audit tests of the payroll cycle are usually extensive.

Accepted Answer

False

Question 2

The file for recording each payroll transaction for each employee and maintaining total employee wages paid for the year to date is the:

Accepted Answer

A

Question 3

What events initiate and terminate the payroll and personnel cycle?

Accepted Answer

The hiring of an employee initiates the cycle and the payments to employees, governments, and other organizations terminate the cycle.

Question 4

Discuss each of the following primary documents and records used in the (1) payment of payroll function, and (2) preparation of payroll tax returns and payment of taxes function in the payroll and personnel cycle: payroll check, W-2 form, and payroll tax returns.

Accepted Answer

The answer of Discuss each of the following primary documents...

Question 5

Match seven of the terms for documents and records (a-k) used in the payroll and personnel cycle with the descriptions provided below (1-7):
a. Human resource records
b. Deduction authorization form
c. Rate authorization form
d. Time card
e. Job time ticket
f. Summary payroll report
g. Payroll check
h. W-2 form
i. Payroll tax returns
j. Payroll journal
k. Payroll master file
________ 1. A file used for recording payroll transactions for each employee and maintaining total employee wages paid for the year to date.
________ 2. A document indicating the time the hourly employee started and stopped working.
________ 3. A document written in exchange for services received from an employee.
________ 4. Forms submitted to local, state, and federal units of government for the payment of withheld taxes and the employer's tax.
________ 5. A form authorizing payroll deductions, including the number of exemptions for withholding of income taxes, U.S. savings bonds, and union dues.
________ 6. A form used to authorize the amount of pay.
________ 7. Records including date of employment, personnel investigations, rates of pay, etc.

Accepted Answer

The answer of Match seven of the terms for documents...

Question 6

Which of the following includes all payroll transactions processed by the accounting system for a given period of time?

Accepted Answer

The payroll transaction file includes all payroll transactions processed by the accounting system for a given period of time. The payroll journal is a record of individual payroll transactions, the time report is a document used to record employee time worked, and the payroll summary is a report that summarizes payroll information for a given period of time.

Question 7

Discuss each of the following primary documents and records used in the personnel and employment function in the payroll and personnel cycle: personnel records, deduction authorization form, and the rate authorization form.

Accepted Answer

The answer of Discuss each of the following primary documents...

Question 8

Most companies, with the exception of small ones, have effective controls over the payroll cycle.

Accepted Answer

Many companies, regardless of size, can struggle with effective controls over the payroll cycle due to complexities in regulations, human error, and potential for fraud.

Question 9

Discuss three important differences between the payroll and personnel cycle and other cycles in a typical audit.

Accepted Answer

The answer of Discuss three important differences between the payroll...

Question 10

An imprest payroll account that has a significant balance may indicate the presence of:

Accepted Answer

The answer of An imprest payroll account that has a...

Question 11

The total of the individual employee earnings in the payroll master file should equal the total:

Accepted Answer

The total of individual employee earnings in the payroll master file should match the balance of gross payroll in the general ledger accounts to ensure accuracy and consistency in financial records. This helps in maintaining the integrity of financial reporting.

Question 12

The computer file used for recording payroll transactions for each employee and maintaining total wages paid for the year to date is the:

Accepted Answer

The computer file used for recording payroll transactions for each employee and maintaining total wages paid for the year to date is called the payroll master file. This file contains all the necessary information related to employee compensation, such as hourly wages, salaries, overtime pay, deductions, and taxes. It serves as a central database for tracking payroll data and generating various reports, including paychecks, tax withholdings, and year-end statements. The other options, payroll transaction file, payroll bank account reconciliation, and payroll tax returns, are related to payroll processing but do not specifically refer to the file used for recording employee wages and maintaining payroll records.

Question 13

Which of the following statements about the payroll and personnel cycle is correct?

Accepted Answer

The answer of Which of the following statements about the...

Question 14

Which of the following departments is most likely responsible for pay rate changes and changes in deductible amounts for employees?

Accepted Answer

Human Resources is typically responsible for managing employee benefits, including changes to pay rates and deductible amounts. They are also responsible for communicating any changes to employees. General Accounting, Treasury, and the Controller departments are less likely to be involved in employee benefit changes.

Question 15

Which department should be authorized to add and delete employees from the payroll or change pay rates and deductions?

Accepted Answer

The human resources department is typically responsible for managing employee payroll and making changes to employee pay rates and deductions. They have access to sensitive employee information and are trained to handle payroll matters. It is important to keep these responsibilities within a dedicated HR department to ensure accuracy, consistency, and compliance with legal and regulatory requirements.

Question 16

While most cycles include at least two classes of transactions, the payroll and personnel cycle includes only one class of transactions.

Accepted Answer

The payroll and personnel cycle typically focuses solely on transactions related to employee compensation and related personnel services, making it unique in having a single class of transactions.

Question 17

Discuss each of the following documents and records used in the timekeeping and payroll preparation function in the payroll and personnel cycle: time card, job time ticket, summary payroll report, payroll journal and payroll master file.

Accepted Answer

The answer of Discuss each of the following documents and...

Question 18

The auditor, in auditing payroll, wants to determine that the individuals included in her sample were employees of the company for the period under review. What is the auditor's best source of evidence?

Accepted Answer

The Human Resource Records would contain information about each employee's start date, job title, and other relevant employment information that would allow the auditor to confirm that each individual included in the payroll sample was truly an employee of the company during the period being audited. The Payroll Master File, Payroll Transaction File, and Payroll Tax Records might also provide some information about the individuals included in the sample, but they would not necessarily confirm whether each individual was truly an employee of the company.

Question 19

The payroll and personnel cycle ends with which of the following events?

Accepted Answer

The payroll and personnel cycle ends with the issuance of paychecks, as this marks the completion of the process of compensating employees for their work. The other options mentioned, such as interviewing job candidates and hiring new employees, are part of the hiring and staffing cycle, while existing employees submitting requests for payment for work performed is part of the payment cycle within the payroll and personnel cycle.

Question 20

Records that include data about employees such as employment date, performance ratings and pay rates are the:

Accepted Answer

Human resource records typically contain information about employees, including employment dates, performance evaluations, and pay rates. Employee screening forms are typically used during the hiring process to gather information about the applicant, while summary payroll reports provide a summary of payroll information for a specific period of time. Employee folders are physical or electronic files that contain records and documents related to an employee's employment.

Quiz 20: Audit of the Payroll and Personnel Cycle