List of Statements 1. The payroll department should use personnel action forms (new employees and terminated employees) to validate employees before they are issued a check. 2. Upon completion, the daily time cards are routed to the cost accountants who use them to post the labor costs to specific WIP accounts such as direct labor, indirect labor and overhead. Which of the statement(s) above is(are) invalid? O Both statements are valid O Statement 2 O Statement 1 Both statements are invalid Answer only

List of Statements 1. The payroll department should use personnel action forms (new employees and terminated employees) to validate employees before they are issued a check. 2. Upon completion, the daily time cards are routed to the cost accountants who use them to post the labor costs to specific WIP accounts such as direct labor, indirect labor and overhead. Which of the statement(s) above is(are) invalid? O Both statements are valid O Statement 2 O Statement 1 Both statements are invalid Answer only

Accounting Information Systems

10th Edition

ISBN:9781337619202

Author:Hall, James A.

Publisher:Hall, James A.

Chapter2: Introduction To Transaction Processing

Section: Chapter Questions

Problem 3P

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7. REA MODEL—CRYOGENICS’ PAYROLL SYSTEM Based on the general information about Cryogenics Inc., in Problem 6, the following describes the com- pany’s payroll procedures for the Tulsa OK, operations. Twice each month Cryogenics’ employees submit their time cards to their respective supervisor, who reviews, approves, and submits them to the payroll department. At that time, the human resources clerk also submits a personnel action form to the payroll clerk. The payroll clerk enters the information from these source documents into the employee records and then adds the employee hours to a payroll regis- ter reflecting employee pay rates, deductions, and job classification. One copy of the payroll register, along with the time cards, is filed in the payroll department, and one copy is sent to the AP depart- ment. Next, the payroll clerk prepares the employee paychecks and the payroll register and sends them to the cash disbursements department. The cash disbursement clerk signs the checks…
TRUE OR FALSE 1. In ideal circumstances, each payroll check is delivered personally to the employee who signs a receipt for it. 2. The amount of income taxes withheld from employee gross pay is an expense to the employer. 3. The amount debited to the Work in Process account represents the amount of direct labor (at regular rate) charged to the different jobs in process.
An important reconciliation in the payroll system is whena. the general ledger department compares the labor distribution summary from cost accounting to the disbursement voucher from accounts payable.b. the personnel department compares the number of employees authorized to receive a pay check to the number of paychecks prepared.c. the production department compares the number of hours reported on job tickets to the number of hours reported on time cards.d. the payroll department compares the labor distribution summary to the hours reported on time cards.
Figure 2-4 in the text illustrates how a customerorder is transformed into a source document, a productdocument, and a turnaround document. Developa similar flowchart for the process of paying hourlyemployees.The Process: Supervisors collect time sheets fromemployees, review them for correctness, and submitthem to payroll where payroll checks are preparedand sent to the employees. In addition a summaryreport of total payroll charges is sent to each departmentmanager, who reviews it for correctness, signsthe report, and returns it to the payroll departmentto be files.
Automated Application Controls: Input Controls. In its automated processing systemover payroll transactions, Brady Company enters the following data from its employees’attendance records (# corresponds to a numeric field; A corresponds to an alphabetic field):∙ Employee number (##-#-##, the employees’ Social Security number).∙ Entity division (AA#, an alphanumeric field containing two letters corresponding to thelocation of the employee and two numbers corresponding to that employees’ supervisor).∙ Hours worked (##.#, a weekly total of hours worked in 0.25-hour increments).After data entry, these data are processed against the information maintained in thatemployee’s master file record. The records are accessed based on employee number. If theemployee is an hourly employee, the number of hours worked is multiplied by the pay rate; ifa salaried employee, the hours worked are checked against a range of acceptable hours. Afterthe gross pay is determined, information in the master file…
C4Q5 Need help Prepare journal entries for the December 31 payroll. 2. Use T-accounts to compute the following: a. The total amount of materials requisitioned into work-in-process during December b. The total amount of direct manufacturing labor recorded in work in process during December (Hint: You have to solve requirements 2b and 2c simultaneously) c. The total amount of manufacturing overhead recorded in work-in-process during December d. Ending balance in work-in-process, December 31 e. Cost of goods sold for December before adjustments for under- or overallocated manufacturing overhead 3. Prepare closing journal entries related to manufacturing overhead. Assume that all under- or overallocated manufacturing overhead is closed directly to Cost of Goods Sold.
Automated Application Controls. The following provides a brief description of the computerized payroll system used by Merriman in its biweekly processing of payroll for its employees.1. Employees automatically record their attendance (hours worked) as they log in at thebeginning and end of the workday.2. At the end of each payroll period (every two weeks), employees print and authorizetheir attendance records, submitting them to their supervisor. The computer prenumbersthese attendance records and generates them in chronological order based on when theemployee submits his or her final attendance for that payroll period.3. Supervisors review the attendance records submitted by their employees and authorizethese records, which the supervisors then forward to data entry conversion operators.4. Data conversion operators input the attendance record number, employee number, andhours worked from the attendance records that have been approved by the employeesupervisors into a file to be used…
Using this supplemental information, analyze the flowchart in the diagram. The personnel department determines the wage rate of all employees. To start the process, personnel sends the payroll coordinator, George Jones, an authorization form in order to add an employee to the payroll. After Jones enters this information into the system, the computer automatically determines the overtime and shift differential rates for the individual, updating the payroll master files. Employees use a time clock to record the hours worked. Every Monday morning, George Jones collects the previous week’s time cards and begins the computerized processing of payroll information to produce paychecks the following Friday. Jones then reviews the time cards to ensure that the hours worked are correctly totaled; the system determines overtime and/or any shift differential. Jones performs all other processes displayed on the flowchart. The system automatically assigns a sequential number to each payroll check…
ARE YOU RIGHT OR WRONG? 1. Ideally, each salary check was handed to the employee, who signs a receipt for it. 2. The total revenue taxes deducted from an employee's gross compensation is a business expenditure. 3. The Task in Process account is debited for the amount of direct labour (at normal rate) invoiced to the various works in progress.
P3-10 Summary of payroll procedures Megerle Custom Cabinet Co. uses the job order cost system. In recording payroll transactions, the following accounts are used: Cash Wages Payable FICA Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Employees Income Tax Payable Payroll Administrative Salaries Miscellaneous Administrative Expense Sales Salaries Miscellaneous Selling Expense Factory Overhead Work in Process Factory employees are paid weekly, while all other employees are paid semimonthly on the fifteenth and the last day of each month. All salaries and wages are subject to all taxes. The income tax withheld amounts to 10% of gross wages. Following is a narrative of transactions completed during January: Jan.7 Recorded total earnings of factory employees amounting to $68,200, less deductions for employees’ income taxes and FICA taxes. 7 Issued check for payment of the payroll. 14 Recorded total earnings of factory employees amounting to $66,300, less…
P3-10 Summary of payroll procedures Megerle Custom Cabinet Co. uses the job order cost system. In recording payroll transactions, the following accounts are used: Cash Wages Payable FICA Tax Payable Federal Unemployment Tax Payable State Unemployment Tax Payable Employees Income Tax Payable Payroll Administrative Salaries Miscellaneous Administrative Expense Sales Salaries Miscellaneous Selling Expense Factory Overhead Work in Process Factory employees are paid weekly, while all other employees are paid semimonthly on the fifteenth and the last day of each month. All salaries and wages are subject to all taxes. The income tax withheld amounts to 10% of gross wages. Following is a narrative of transactions completed during January: Jan.7 Recorded total earnings of factory employees amounting to $68,200, less deductions for employees’ income taxes and FICA taxes. 7 Issued check for payment of the payroll. 14 Recorded total earnings of factory employees amounting to $66,300, less…
INPUT VALIDATIONDescribe the types of input edits used for the following data in a payrollsystem. a. Employee nameb. Employee numberc. Social security number d. Rate per hour or salarye. Marital statusf. Number of dependents g. Cost centerh. Regular hours workedi. Overtime hours worked