The Multiple Choice Questions Blog

For the following statement below about the internal controls over payroll, select whether the statement is True, False, No Significant or Material Impact, or No Impact.

• Reperformance of calculations is unnecessary where the payroll system is computerised.

Select ONE answer:

1. True
2. No Significant or Material Impact
3. False
4. No Impact

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 – while the risk of errors can be reduced in a computerised payroll system, a sample of calculations should still be checked. This may also bring to light errors with standing data and input.
4. Not correct

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For the following statement below about the internal controls over payroll, select whether the statement is True, False, No Significant or Material Impact, or No Impact.

• Leavers and joiners should be authorised by a senior member of staff.

Select ONE answer:

1. False
2. True
3. No Significant or Material Impact
4. No Impact

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 about the internal controls over payroll, select whether the statement is True, False, No Significant or Material Impact, or No Impact.

• The payroll should be checked back to individual employee personnel records regularly.

Select ONE answer:

1. True
2. False
3. No Significant or Material Impact
4. No Impact

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
2. Not correct
3. Not correct
4. Not correct

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

Which ONE of the following features in the payroll system of Alex Manufacturing Ltd could result in the employee costs figure in the financial statements being MISSTATED?

Select ONE answer:

1. Rates of pay are negotiated at a local level; there is no central control
2. Personnel records are kept up to date
3. The payroll department receives confirmation of new employees in writing
4. The payroll clerk CAN amend standing data on the payroll system without the written authorisation of a senior member of staff

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 – Unauthorised amendments could result in the creation of bogus employees or overpayment of existing employees. Options 1,2 and 3 would not lead to misstatement in the financial statements

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

Which ONE of the following features in the payroll system of Alex Manufacturing Ltd could result in the employee costs figure in the financial statements being MISSTATED?

Select ONE answer:

1. Rates of pay are negotiated at a local level; there is no central control
2. The payroll clerk cannot amend standing data on the payroll system without the written authorisation of a senior member of staff
3. Personnel records are NOT kept up to date
4. The payroll department receives confirmation of new employees in writing

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 – Personnel records contain details of pay rates. If these are not kept up to date standing data in the payroll system may also be invalid. Options 1,2 and 4 would not lead to misstatement in the financial statements
4. Not correct

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