Financial & Managerial Accounting
14th Edition
ISBN: 9781337119207
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Question
Chapter 10, Problem 10.14EX
To determine
Internal control: Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations. The following are the principles of internal control:
- Authorizing the responsibility
- Segregation of duties
- Documenting and recording transactions
- Physical controls
- Periodic independent verification
- Human resource controls
Payroll: The total payment that a company is required to pay to its employee for the services received is called as payroll.
To Identify: Whether Restaurant B has internal controls to catch the payroll error.
To determine
To Identify: The way to detect the payroll error.
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Internal control procedures
Dave's Scooters is a small manufacturer of specialty scooters. The company employs 14 production workers and four administrative persons. The following procedures are used to
process the company's weekly payroll:
a. Whenever an employee receives a pay raise, the supervisor must fill out a wage adjustment form, which is signed by the company president. This form is used to change the
employee's wage rate in the payroll system.
b. All employees are required to record their hours worked by clocking in and out on a time clock. Employees must clock out for lunch break. Due to congestion around the time
clock area at lunch time, management has not objected to having one employee clock their entire department in and out.
c. Whenever a salaried employee is terminated, Personnel authorizes Payroll to remove the employee from the payroll system. However, this procedure is not required when an
hourly worker is fired. Hourly employees only receive a paycheck if their…
Matt Demko is the loading dock supervisor for a dry cement packaging company. His work crew is composed of unskilled workers who load large transport trucks with bags of cement, gravel, and sand. The work is hard, and the employee turnover rate is high. Employees record their attendance on separate time cards. Demko authorizes payroll payments each week by signing the time cards and submitting them to the payroll department. Payroll then prepares the paychecks and gives them to Demko, who distributes them to his work crew. a. Prepare a systems flowchart of the procedures described here. b. Identify any control problems in the system. c. What sorts of fraud are possible in this system?
Employees at the Sagerod Manufacturing Company record their hours worked on paper time cards that are inserted into a time clock machine at the beginning and end of each shift. On Fridays, the supervisor collects the time cards, reviews and signs them, and sends them to the payroll clerk. The clerk calculates the pay for each employee and updates the employee earnings file. This involves adding a new record for each employee in the pay period that reflects the employee’s gross pay, tax deductions, and other withholdings for the period. The clerk then prepares a paycheck for each employee and records them in the check register. The check register and corresponding paychecks reflect each employee’s net earnings for the period. Based on these records, the clerk prepares a payroll summary, which is sent with the paychecks to the cash disbursements clerk. The clerk reviews the payroll summary, updates the cash disbursements journal to record the total payroll, and prepares a check for the…
Chapter 10 Solutions
Financial & Managerial Accounting
Ch. 10 - Does a discounted note payable provide credit...Ch. 10 - Employees are subject to taxes withheld from their...Ch. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - Prob. 5DQCh. 10 - To match revenues and expenses properly, should...Ch. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - When should the liability associated with a...Ch. 10 - Prob. 10DQ
Ch. 10 - Proceeds from notes payable On January 26, Nyree...Ch. 10 - Prob. 10.2BECh. 10 - Prob. 10.3BECh. 10 - Journalize payroll tax The payroll register of...Ch. 10 - Prob. 10.5BECh. 10 - Journalizing installment notes On the first day of...Ch. 10 - Prob. 10.7BECh. 10 - Prob. 10.1EXCh. 10 - Entries for notes payable Bennett Enterprises...Ch. 10 - Evaluating alternative notes A borrower has two...Ch. 10 - Entries for notes payable A business issued a...Ch. 10 - Entries for discounted note payable A business...Ch. 10 - Prob. 10.6EXCh. 10 - Prob. 10.7EXCh. 10 - Calculate payroll An employee earns 44 per hour...Ch. 10 - Prob. 10.9EXCh. 10 - Prob. 10.10EXCh. 10 - Payroll tax entries According to a summary of the...Ch. 10 - Payroll entries The payroll register for D. Salah...Ch. 10 - Prob. 10.13EXCh. 10 - Prob. 10.14EXCh. 10 - Prob. 10.15EXCh. 10 - Accrued vacation pay A business provides its...Ch. 10 - Pension plan entries Yuri Co. operates a chain of...Ch. 10 - Prob. 10.18EXCh. 10 - Entries for installment note transactions On the...Ch. 10 - Entries for installment note transactions On...Ch. 10 - Prob. 10.21EXCh. 10 - Prob. 10.22EXCh. 10 - Prob. 10.23EXCh. 10 - Prob. 10.24EXCh. 10 - Liability transactions The following items were...Ch. 10 - Entries for payroll and payroll taxes The...Ch. 10 - Wage and tax statement data on employer FICA tax...Ch. 10 - Prob. 10.4APRCh. 10 - Payroll accounts and year-end entries The...Ch. 10 - Prob. 10.1BPRCh. 10 - Entries for payroll and payroll taxes The...Ch. 10 - Prob. 10.3BPRCh. 10 - Prob. 10.4BPRCh. 10 - Payroll accounts and year-end entries The...Ch. 10 - Prob. 3CPPCh. 10 - Continuing Company Analysis-Amazon: Short-term...Ch. 10 - Prob. 2ADMCh. 10 - Prob. 3ADMCh. 10 - Prob. 4ADMCh. 10 - Prob. 10.1TIFCh. 10 - Prob. 10.3TIF
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