Chapter 6
2) Which department authorizes changes in employee pay rates?
- Production department does the authorizing; Production employees prepare two types of time records. This helps the cost accounting department. They use this to allocate direct labor changes to work-in-process (WIP) Accounts.
3) Why should the employee’s supervisor not distribute paychecks?
- Because there is a chance the supervisor could create a non-existent employee and time card him in then taking his checks for themselves. This can be avoided by not letting them distribute paychecks themselves. Given the responsibility to an independent of the payroll process- not involved in payroll authorizations or preparation tasks.
4) Why should employee paychecks be drawn against a special checking account?
- So AP clerk can verify the accuracy of the payroll register. This can also help with other employees helping to cheat the system such as clocking in for others. It is a very important system to watch because the assets associated with the payroll system are labor and cash. Both can be misappropriated through improper access to accounting records.
8) What documents are included in the audit trail for payroll? - It includes the time cards, job tickets, and disbursement vouchers, then accounting journal info and payroll registers. Then the sub ledgers and general ledger accounts as well.
12) How do fixed asset systems differ from purchases systems? - When it comes to the purchase system, you have the order itself then the purchase approval and purchase orders too. All these go their respective vendors, authorization procedures and accounts payable. When it comes to the fixed assets the disposal report is needed but also a posting to the sub ledgers and asset changes for the user department.
13) What are three tasks of the fixed asset system? - Disposal Report, Post, and Asset Changes.
17) Which department performs the formal record keeping function for fixed asset? -
- Production department does the authorizing; Production employees prepare two types of time records. This helps the cost accounting department. They use this to allocate direct labor changes to work-in-process (WIP) Accounts.
3) Why should the employee’s supervisor not distribute paychecks?
- Because there is a chance the supervisor could create a non-existent employee and time card him in then taking his checks for themselves. This can be avoided by not letting them distribute paychecks themselves. Given the responsibility to an independent of the payroll process- not involved in payroll authorizations or preparation tasks.
4) Why should employee paychecks be drawn against a special checking account?
- So AP clerk can verify the accuracy of the payroll register. This can also help with other employees helping to cheat the system such as clocking in for others. It is a very important system to watch because the assets associated with the payroll system are labor and cash. Both can be misappropriated through improper access to accounting records.
8) What documents are included in the audit trail for payroll? - It includes the time cards, job tickets, and disbursement vouchers, then accounting journal info and payroll registers. Then the sub ledgers and general ledger accounts as well.
12) How do fixed asset systems differ from purchases systems? - When it comes to the purchase system, you have the order itself then the purchase approval and purchase orders too. All these go their respective vendors, authorization procedures and accounts payable. When it comes to the fixed assets the disposal report is needed but also a posting to the sub ledgers and asset changes for the user department.
13) What are three tasks of the fixed asset system? - Disposal Report, Post, and Asset Changes.
17) Which department performs the formal record keeping function for fixed asset? -