90) The function responsible for reconciling the bank account upon which voucher checks are
drawn is
A) cash disbursements.
B) accounts payable.
C) internal audit.
D) purchasing.
91) The greatest amount of internal and business process control in the cash disbursements
process comes from
A) the signing of voucher checks by an authorized party.
B) the prenumbering of vouchers and voucher checks.
C) the accounts payable function.
D) a final review of transaction documents prior to the authorization of payment.
92) The primary objective of a voucher system is to
A) sign checks.
B) review cash payments.
C) record liabilities.
D) reconcile the vendor subsidiary ledger to the control account.
93) Which one of the following identifies the necessary information to maintain a built-up
voucher system?
A) All approved invoices awaiting payment, paid invoices, and the vendor subsidiary ledger
B) All approved invoices awaiting payment
C) All paid and unpaid invoices
D) A vendor subsidiary ledger and paid invoice file
94) SAP ERP contains more than one human resource module. The module that incorporates
organizational structure represented as an administrative hierarchy composed of units is
A) time management.
B) personnel planning and development.
C) payroll.
D) personnel administration.
95) A timekeeping system in which all employee attendance and absence information is
maintained is
A) comprehensive time management.
B) negative timekeeping system.
C) positive timekeeping system.
D) complex timekeeping system.
96) In the ERP HR modules, several infotypes for the same object can exist at the same time, but
only one infotype for the object is valid. In such a case, the other infotypes are referred to as
A) delimited.
B) invalid.
C) archived.
D) parents.
97) In the ERP system, which one of the following is an “infotype”?
A) Hiring
B) Leaving employment
C) Changing jobs
D) Employee personnel data
98) In ERP, human resource object types are identified with a one or two letter identifier. The
code for the object Employee is
A) E.
B) EE.
C) P.
D) W.
99) The department responsible for authorizing employee pay deductions is the
A) payroll department.
B) personnel department.
C) independent paymaster.
D) production department (for factory workers).
100) The department responsible for collecting and maintaining time cards and reconciling these
to job time summary tickets is the
A) timekeeping department.
B) payroll department.
C) personnel department.
D) production department (for factory workers).
101) The department responsible for the actual computation and preparation of payroll is the
A) accounts payable department.
B) payroll department.
C) personnel department.
D) production department (for factory workers).
102) Which of the following should not have access to signed paychecks?
A) Payroll and personnel
B) Cash disbursement, personnel, and timekeeping
C) Personnel, payroll, and timekeeping
D) Cash disbursement, personnel, and bookkeeping
103) Which one of the following represents a weakness in internal control regarding the human
resources area?
A) The payroll staff distributes paychecks to employees in other departments.
B) The payroll department supervisor makes decisions regarding the hiring of payroll department
employees.
C) The supervisors of all departments are responsible for initiating requests for salary increases
for their subordinate employees.
D) Supervisors are responsible for reviewing and approving time reports of their subordinate
employees.
104) The federal tax which requires that employees and employers contribute equally for old
age, survivors’, disability, and hospital insurance benefits is
A) federal unemployment tax.
B) federal income tax.
C) workers’ compensation.
D) social security tax.
105) Employers engaged in interstate commerce are required by law to pay overtime at a
minimum of one and one-half times the regular rate for hours worked in excess of 40 per week.
The law that requires this is called the
A) Fair Labor Standards Act (FLSA).
B) Federal Unemployment Tax Act (FUTA).
C) Federal Income Tax Act (FITA).
D) Federal Insurance Contributions Act (FICA).
106) Various payroll forms and reports must be submitted to federal and state entities by certain
deadlines. The federal form which is not due on or before January 31 of each year is the
A) Form W-2.
B) Form W-3.
C) Form 941.
D) Form 1099-MISC.
107) Form 941 is filed to report federal income and social security taxes withheld from
employees. It is filed
A) weekly.
B) monthly.
C) quarterly.
D) annually.
108) Presented below is a list of terms relating to accounting information systems, followed by
definitions of those terms.
Required: Match the letter next to each definition with the appropriate term. Each answer will be
used only once.
________ 1. Purchase requisition
________ 2. Procurement
________ 3. Approved vendor list
________ 4. Blind count
________ 5. Purchase order
________ 6. Attribute rating
________ 7. Request for quotation
________ 8. Receiving report
________ 9. Invoice verification
________ 10. Voucher package
A. Counters in receiving do not have access to quantities shown on purchase orders.
B. Document used to request a purchase
C. A summary of vendors approved for use by the purchasing function
D. A collection of documents that are reviewed and approved to authorize a transaction
E. An approach to vendor selection which identifies, lists, and evaluates several different
aspects concerning a vendor
F. Prepared to document the receipt of deliveries from vendors
G. The document issued to a vendor to initiate a purchase
H. The business process of selecting a source, ordering, and acquiring goods or services
I. The review of purchasing documentation prior to authorizing payment to vendors
J. Documents used to request competitive bids from vendors
20
109) The following ten paragraphs describe control weaknesses in customer order and account
management business processes. Listed below are ten controls that may help regulate the
weaknesses:
A. Separation of payroll and personnel departments
B. Independent paymaster to distribute paychecks
C. Imprest payroll bank account
D. Vendor selected by purchasing department
E. Timekeeping department reconciles time cards to job time summaries
F. Requisition form prepared by requestor
G. Receiving report signed by stores
H. Vendor list approved independent of purchasing
I. Purchase order copy sent to accounts payable
J. Receiving report copy sent to accounts payable
Required: In the blank next to each number, list one capital letter representing the best control to
address the system weakness. You will use each letter only once.
1. ________ Rattlesnake Wire Company’s purchasing manager selected his brother-in-law as a
vendor and received a kickback for providing the business.
2. ________ Blazing Saddles Corporation ordered goods that receiving personnel stole.
Receiving prepared a receiving report and sent it to accounts payable. The company
unknowingly paid for the stolen goods.
3. ________ The production manager at Ghost Manufacturing Company told the payroll
department he had hired a new employee. On payday, the paymaster could not find the employee
and upon investigation, found that the employee did not exist.
4. ________ Price Company’s purchasing department ordered goods requested by the
maintenance department by phone. When the goods arrived, the maintenance department
claimed that the goods were of such poor quality they could not be used.
5. ________ Connecticut Yankee Manufacturing Company ordered goods that were never
received. The company, as a matter of standard policy, paid the invoice.
6. ________ Southern Star Manufacturing Company’s payroll department routinely distributed
paychecks on payday. The payroll supervisor suddenly quit her job. On the next payday, the
payroll department could not find employees to claim two paychecks.
7. ________ Panhandle Products Company cannot easily identify vendors, and consistently
selects vendors whose goods are overpriced and whose delivery schedules are too slow for
Panhandle’s needs.
8. ________ Lone Star Production Company received goods that were never ordered. The
company paid the invoice.
9. ________ Half Moon Manufacturing Company’s production manager is unsure that the second
shift employees are working all hours reported on the job time tickets.
10. ________ The internal auditor of Eastern Overboard Company prepares the bank
reconciliation. He has difficulty managing the large number of outstanding checks at month-end
in the bank reconciliation. Most of the outstanding checks are employee paychecks.
110) The following ten items describe positions or departments related to procurement and
human resource business processes. Listed below are ten positions or departments:
A. Cash disbursements
B. Paymaster
C. Purchasing
D. Receiving
E. Accounts Payable
F. Payroll
G. Personnel
H. Timekeeping
I. Internal audit
J. Stores
Required: Next to each number, write the letter of the answer representing the department or
position described.
________ 1. Has authority to request the purchase of needed items
________ 2. Prepares a control total of checks paid and sends it to general ledger
________ 3. Reconciles bank statements
________ 4. Performs final matching of documents to authorize payments
________ 5. Computes gross pay, deductions, and net pay
________ 6. Counts and inspects incoming goods
________ 7. Has responsibility for distributing employee payroll checks
________ 8. Maintains clock cards and reconciles them to job time summary sheets
________ 9. Authorizes new employees and their pay rates and payroll deductions
________ 10. Frequently uses request-for-quotation forms to obtain bids
111) Below are the documents commonly encountered in a procurement business process:
a. Purchase requisition
b. Purchase order
c. Receiving report
d. Payment voucher
Required: For each document, (1) state where it originated, and (2) give the entity or entities
(e.g., other departments or parties) which would most likely receive a copy of the document or
that should access it in a database.
112) Below are three procedures that violate common internal control guidelines over the
purchasing function:
a. The company has never established any written policies regarding conflicts of interest for its
buyers.
b. The company’s buyers are allowed to select suppliers without submitting a list of bidders for
review.
c. The same buyers who ask suppliers to submit requests for quotations receive the suppliers’
bids directly from the mailroom.
Required: For each procedure, state one problem that could arise because of the failure to follow
common guidelines in the purchasing function.
113) The following is a description of the payroll procedures for Cherokee Custom Crafters, a
small company that customizes vans and RVs according to customers’ specifications:
114) Name four federal acts or types of taxes that relate to payroll, and briefly discuss the main
provision of each.
115) Discuss the employer’s requirements for FICA tax, including the procedures for deposit,
penalties for failure to deposit, the form used to report the tax, and the due dates of the form.
116) Discuss why the buyer-vendor relationship is the most critical point of control in the
procurement business process, and describe two procedures that can improve control in the
buyer-vendor relationship.
117) When goods arrive at a company’s location, what are the ways a receiving report (goods
receipt document) can be prepared in SAP ERP’s procurement business process?
118) Explain the difference in a voucher system between recording invoices when they are
approved for payment versus recording invoices when paid.