Hall_AIS+7e+SM_Ch06

Hall_AIS+7e+SM_Ch06 - CHAPTER 6 THE EXPENDITURE CYCLE PART...

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CHAPTER 6 THE EXPENDITURE CYCLE PART II: PAYROLL PROCESSING AND FIXED ASSETS PROCEDURES
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Chapter 6 page 227 REVIEW QUESTIONS 1. Job tickets capture the time spent on each job during the day and are used to allocate the labor charges to the WIP account. 2. The personnel department, through the personnel action form authorizes changes to employee pay rates. 3. A form of payroll fraud involves a supervisor submitting fraudulent time cards for nonexistent employees. The resulting paychecks, when given to the supervisor are then cashed by the supervisor. This type of fraud can be reduced or eliminated by using a paymaster to distribute paychecks to employees in person. Any uncollected paychecks are then returned to payroll. 4. A separate imprest account is established for the exact amount of the payroll based on the payroll summary. When the paychecks are cashed, this account should clear leaving a zero balance. Any errors in checks (additional checks or abnormal amounts) would result in a non-zero balance in the imprest account and/or some paycheck would not clear. This will alert management to the problem so corrective action can be taken. 5 . A form of payroll fraud involves employees clocking the time cards of absent employees. By supervising the clocking in and out process, this fraud can be reduced or eliminated. 6. The personnel action form is a list of personnel changes that enables the payroll department to prepare a list of currently active employees. Any submission of time cards by supervisors for fictitious or ex-employees should thus be detected.
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Chapter 6 page 228 7. The payroll clerk reconciles the information received from personnel and production, calculates the payroll and distributes the paychecks. Further, the payroll clerk sends summary information to the accounts payable clerk. 8. a. time cards, job tickets, and disbursement vouchers. b. journal information which comes from the labor distribution summary and the payroll register. c. subsidiary ledger accounts (employee records and expense accounts). d. general ledger accounts (payroll control, cash, and payroll clearing). 9. The major advantage of a batch process with sequential files is control. Back-up is also another advantage. The disadvantages are inefficiency due to high labor costs to manually prepare journal vouchers and handle them. Another disadvantage is the infrequency of reconciliation. 10. The advantages of a batch system with direct access files are increased efficiency since master files (such as the general ledger) need not be recreated with each update thus permitting more frequent reconciliation. The disadvantage is the need to take extra measures to ensure the back-up and data integrity within the system. 11.
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Hall_AIS+7e+SM_Ch06 - CHAPTER 6 THE EXPENDITURE CYCLE PART...

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