The Multiple Choice Questions Blog

Alex Manufacturing Ltd employs several trainees who start every six months.

All trainees must complete a six-month probationary period before progressing to the next level of the traineeship.

The external accountant providing assurance on the efficiency of the controls’ operation has identified the following deficiency in Alex Manufacturing Ltd’s payroll system.

For the deficiency stated below, select the most likely consequence which might arise because of that deficiency.

• Employees are not given a personnel file until they have completed their six-month probationary period.

Select ONE answer:

1. The computerised payroll may contain miscalculations in the wage rate
2. There is NO impact on the efficiency of the controls
3. The impact on the controls is not material and requires no action
4. There is a high risk that the trainees will be paid the wrong amounts

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct

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For the following statement below, select whether it is Unimportant, No Impact, True or False in respect of internal controls over payroll

• Changes in pay rates should be authorised by senior management.

Select ONE answer:

1. False
2. No impact
3. True
4. Unimportant

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

For the following statement below, select whether it is Unimportant, No Impact, True or False in respect of internal controls over payroll

• Reviewing wages paid against the wages budget helps ensure employees are paid the correct amounts.

Select ONE answer:

1. False
2. True
3. No impact
4. Unimportant

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

For the following statement below, select whether it is Unimportant, No Impact, True or False in respect of internal controls over payroll

• Requiring employees to clock in and out of work helps to ensure that they are paid at the correct pay rate.

Select ONE answer:

1. False
2. No impact
3. Unimportant
4. True

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – clocking in and out of work ensures correct recording of the hours clocked in and out, but has NO bearing on the rate of pay.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Alex Manufacturing Ltd has several staff on maternity leave claiming statutory maternity pay.

Which ONE of the following controls would NOT ensure that the correct payments are made to employees?

Select ONE answer:

1. The payroll should be checked back to individual employee personnel records
2. Payroll totals should be compared to adjusted budgets each month
3. BACS transfer lists should be authorised by the head of personnel
4. Total tax deductions should be reconciled with the tax returns

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct – This is the right answer as it does not relate directly to the employees’ payments but to their tax deductions.

This work is licensed under a Creative Commons Attribution 4.0 International License.