Possible Q&A

Chapter 14—The Human Resources Process (HR) Management and Payroll Process

TRUE/FALSE

1. A job time ticket is the source document used in the payroll system to determine the hours for which an employee should be paid.

ANS: F

2. Attendance time records reflect the start and stop times on specific jobs to allow the distribution of payroll costs to jobs in process (or to other accounts).

ANS: F

3. Attendance time records show the time periods that employees are in attendance site and available for work.

ANS: T

4. The checking account is a general ledger account that should show a zero balance after both the debit for gross pay earned by workers and the credit for gross pay distributed to jobs have been posted to the account.

ANS: F

5. An imprest payroll bank account is one to which cash transfers are made in an amount exactly equal to the total net pay for the period.

ANS: T

6. Human resource management is the process of managing how people are hired, developed, assigned, motivated and retained.

ANS: T

7. The hman capital management process is an interacting structure of people equipment, methods, and controls that supports the decision needs of the HR department

ANS: F

8. The payroll process maintains data for payroll taxes, fringe benefits, attendance reporting, timekeeping, and paying employees for work performed.

ANS: T

9. The manager of safety, health, and human services usually reports to the controller.

ANS: F

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10. The manager of employee and industrial relations helps to settle employee complaints and grievances.

ANS: T

11. The manager of safety, health and human services has key functions that include plans and forecasts of an organization’s short term and long term HR needs.

ANS: F

12. Systems that allow employees to access personal as well as business related information and functions are known as self service systems.

ANS: T

13. As shown in the “computer” column of the HR flowchart, process inputs are actions taken by departmental managers or supervisors that are captured on various online forms (enterprise system screens).

ANS: F

14. According to the HRM flowchart, the employee/payroll data is stored in the enterprise database.

ANS: T

15. The skills inventory data maintains data concerning an organization’s short term and long term staffing requirements.

ANS: F

16. The labor force planning data catalogs each employee’s set of relative skills.

ANS: F

17. Internal audit usually reports to the controller.

ANS: F

18. The VP finance usually has direct supervision of the treasurer, controller, and internal audit.

ANS: T

19. The GL supervisor usually reports to the treasurer.

ANS: F

20. Business tax deposits are made directly to the IRS.

ANS: F

21. Attendance time records show the time periods that employees are in attendance.

ANS: F

The Human Resources Process (HR) Management and Payroll Process 331

22. Job time records reflect the start and stop times on specific jobs.

ANS: T

23. The trigger for the payroll process “pay employees” is the payroll register.

ANS: F

24. The data flow between “prepare paychecks” and “prepare disbursement voucher” is the payroll register.

ANS: T

25. The employee/payroll master data is the central repository of data about people who work for the organization.

ANS: T

26. The employee wage and tax statement is known as a W-4.

ANS: F

27. Annuities, pensions, and retirement pay are reported on Form 1099-P.

ANS: F

28. Wages taxable under FICA are reported on Form 941.

ANS: T

29. An electronic time management system is a computer based system that captures, stores, and reports time.

ANS: T

30. A company that specializes in rendering payroll services to client companies for a fee is a payroll service bureau.

ANS: T

31. Independent contractors are employees who do not actually work for the company, but who receive paychecks.

ANS: F

32. For good internal control, there should be a segregation of duties between personnel data creation/modification, payroll preparation, and disbursement of the checks.

ANS: T

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33. As each field of data is completed on a preformatted screen the cursor moves to the next field on the screen with a structured data entry process.

ANS: T

34. The control plan “use an imprest bank account” entails having paychecks distributed to employees by an entity not otherwise involved in payroll processing.

ANS: F

35. In a imprest system, the bank account is reimbursed for the exact amount of the disbursements made from the fund, rather than being reimbursed for round amounts.

ANS: T

36. A payroll clearing account is used to transfer the exact amount necessary to cover payroll checks and related expenses.

ANS: T

37. One of the control goals of the operations process is to ensure the security of operations.

ANS: F

MULTIPLE CHOICE

1. The process of preparing paychecks for hourly employees is triggered by which of the following data flows?a. validated attendance time cardsb. job time ticketsc. a temporal eventd. employee paychecks

ANS: A

2. Information for distributing labor charges to jobs, departments, or other accounts comes primarily from:a. attendance time cardsb. job time ticketsc. a temporal eventd. employee paychecks

ANS: B

3. In a payroll system logical DFD, all of the following processes likely would provide updates to the general ledger except for:a. reconcile hours workedb. distribute labor costsc. pay employeesd. accrue employer taxes

ANS: A


4. The control plan independent reconciliation of payroll bank account is directed primarily at achieving which of the following control goals?a. Provide employees with timely pay checks.b. Ensure efficient employment of resources.c. Ensure security of resources.d. Ensure validity, completeness and accuracy of time card inputs.

ANS: C

5. Which of the following activities related to payroll is not an effective control plan?a. Paychecks should be drawn on an imprest payroll bank account. b. Approve imprest clearing checkc. Approve attendance time data and job time datad. After their preparation, paychecks should be delivered directly to the employees'

supervisors for distribution to the employees.

ANS: D

6. According to the text, what is the process of managing how people are hired, developed, assigned, motivated and retained that presumes that employees are a strategic investment?a. organizational managementb. personnel managementc. human resource managementd. none of the above

ANS: C

7. Which of the following began with the handling of payroll, personnel administration, and later added the functions of recruiting and employee relations?a. strategic managementb. personnel managementc. human capital managementd. none of the above

ANS: B

8. Which of the following recognized the importance of personnel in achieving organizational objectives, but viewed personnel as something that could be controlled?a. human resource managementb. personnel managementc. human capital managementd. none of the above

ANS: A

9. Which of the following is based on the three principles of individuals add value to the organization, that employees are human assets, and that an employee’s relationship with the organization must be nurtured for maximum lifetime value?a. human resource managementb. personnel managementc. human capital managementd. none of the above

ANS: C

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10. Which of the following is not part of the information provided by HR management to support management decisionsa. generating a variety of HR forms and documentsb. preparing management reportsc. preparing governmental reportsd. none of the above

ANS: D

11. Which of the following is false regarding the payroll management process?a. it supports the repetitive work routines of the payroll processb. was traditionally considered part of the HR management processc. maintains data for payroll taxes and fringe benfitsd. none of the above

ANS: B

12. The HR module in most ERP systems includes all of the following except:a. personnel managementb. time managementc. payrolld. none of the above

ANS: D

13. All of the following are advantages of integrating the HR and payroll processes except:a. creating a single source of obtaining HR informationb. data redundancyc. improving data accuracyd. none of the above

ANS: B

14. The key functions of planning and forecasting HR needs, analyzing job skills, assisting in recruiting, and helping new hires adjust to their work environment is the job position of the manager of:a. personnel appraisal and developmentb. employee and industrial relationsc. human resource systemsd. personnel planning and staffing

ANS: D

15. The key functions of handling employee complaints and negotiating with unions is the job position of the manager of:a. personnel appraisal and developmentb. employee and industrial relationsc. human resource systemsd. personnel planning and staffing

ANS: B


16. The key functions of meeting information needs of personnel and serving as a liaison between the IT department and the personnel department is the job position of the manager of:a. personnel appraisal and developmentb. employee and industrial relationsc. human resource systemsd. personnel planning and staffing

ANS: C

17. The key functions of assisting managers in setting rewards for good employee performance, helping line managers provide training or take disciplinary action, and reducing employee turnover by helping workers achieve their career goals is the job position of the manager of:a. personnel appraisal and developmentb. employee and industrial relationsc. human resource systemsd. personnel planning and staffing

ANS: A

18. According to the flowchart for the HR management process, the capturing of information about HR related events is:a. enter HR datab. selecting employeesc. evaluating employeesd. terminating employees

ANS: A

19. According to the flowchart for the HR management process, satisfying immediate hiring needs is part of the process of:a. process inputsb. enter employment requestc. evaluating employeesd. terminating employees

ANS: B

20. According to the flowchart for the HR management process, the flowchart begins in:a. various departmentsb. employeesc. computerd. HR department

ANS: A

21. According to the flowchart for the HR management process, the update of employee/payroll master data and preparing documents, screens and reports is in the column for:a. various departmentsb. employeesc. computerd. HR department

ANS: C

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22. According to the flowchart for the HR management process, needs requests, supervisor review, employee termination, and employee requests are approved in the column for:a. various departmentsb. employeesc. computerd. HR department

ANS: D

23. Payroll reports may be provided to all of the following except:a. unionsb. employeesc. governmentd. none of the above

ANS: D

24. Which of the following data stores is updated when employees gain new on the job training?a. labor force planning datab. skills inventory datac. payroll datad. none of the above

ANS: B

25. Which of the following data stores is updated for job specifications?a. labor force planning datab. skills inventory datac. payroll datad. none of the above

ANS: A

26. The payroll supervisor usually reports to:a. the treasurerb. the cashierc. the controllerd. the VP Finance

ANS: C

27. Internal audit usually reports to:a. the treasurerb. the cashierc. the controllerd. the VP finance

ANS: D


28. Which of the following shows when the employees are at work in general and are maintained usually near the entrance of the workplace taking the physical form of cards?a. attendance time recordsb. job time recordsc. payroll contribution noticed. none of the above

ANS: A

29. Which of the following shows start and stop times with the purpose of allowing the distribution of payroll costs to work in process?a. attendance time recordsb. job time recordsc. payroll contribution noticed. none of the above

ANS: B

30. Which of the following is a data flow that generally goes to insurance companies?a. attendance time recordsb. job time recordsc. payroll contribution noticed. none of the above

ANS: C

31. Which of the following is a data flow that generally goes to government agencies?a. attendance time recordsb. job time recordsc. payroll contribution noticed. none of the above

ANS: D

32. Payroll tax deposits are initially remitted to:a. government agenciesb. the bankc. the general ledger processd. none of the above

ANS: B

33. Payroll tax reports are initially remitted to:a. government agenciesb. the bankc. the general ledger processd. none of the above

ANS: A

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34. Updates of the tax rates data are stored in:a. tax rates datab. employee/payroll master datac. HR master datad. none of the above

ANS: A

35. What is the process that compares total hours of each worker as shown by the attendance record with the hours reflected on the job time records for each employee?a. accrue employer taxesb. distribute labor costsc. reconcile hours workedd. pay employees

ANS: C

36. What is the process that interfaces with the GL to provide the necessary journal entries to allocate employee payroll?a. accrue employer taxesb. distribute labor costsc. reconcile hours workedd. pay employees

ANS: B

37. What is the process that is initiated by validated attendance time records?a. accrue employer taxesb. deistribute labor costsc. reconcile hours workedd. pay employees

ANS: D

38. Which of the following is processed in batches?a. HR activitiesb. payrollc. both a and bd. none of the above

ANS: B

39. Which of the following is processed in the immediate mode?a. HR activitiesb. payrollc. both a and bd. none of the above

ANS: A


40. Which of the following is an example of processing the company’s payroll for a fee?a. electonic time managementb. payroll direct deposit systemc. payroll service bureaud. none of the above

ANS: C

41. Which of the following has the inputs of attendance and work on specific jobs?a. electronic time managementb. payroll direct deposit systemc. payroll service bureaud. none of the above

ANS: A

42. According to the flowchart of the payroll process, the payroll register is on a display in the column fora. electonic time management systemb. computerc. accounts payable departmentd. cashier

ANS: C

43. According to the flowchart of the payroll process, the approved payroll disbursement voucher is on display in the column fora. electonic time management systemb. computerc. accounts payable departmentd. cashier

ANS: D

44. Which of the following payroll related frauds has the highest median loss?a. ghost employeesb. falsified hours and salaryc. commission schemesd. false workers compensation claims

ANS: A

45. Which of the following payroll related frauds has the lowest median loss?a. ghost employeesb. falsified hours and salaryc. commission schemesd. false workers compensation claims

ANS: B

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46. Employee fraud schemes in the area of reimbusement of expenses include all of the following except”a. overstating expensesb. fake receiptsc. overstating commissionsd. using personal expenses as business expenses

ANS: C

47. Which of the following control plans transers the exact amount of funds necessary to cover payroll checks and related expenses?a. approve attendance time data and job time datab. distribute labor costsc. independent paycheck distributiond. use payroll clearing account

ANS: D

48. Which of the following control plans, when this entry balances as it should, we will detect and correct any discrepancies between the attendance time and job time?a. approve attendance time data and job time datab. distribute labor costsc. independent paycheck distributiond. use payroll clearing account

ANS: B

COMPLETION

1. A(n) ____________________ is the source document used in the payroll system to determine the hours for which an employee should be paid.

ANS: attendance time card

2. ____________________ reflect the start and stop times on specific jobs to allow the distribution of payroll costs to jobs in process (or to other accounts).

ANS: Job time records

3. ____________________ show the time periods that employees are in attendance at the job site and available for work.

ANS: Attendance time records

4. The ____________________ is a general ledger account that should show a zero balance after both the debit for gross pay earned by workers and the credit for gross pay distributed to jobs have been posted to the account.

ANS: payroll clearing account


5. A(n) ____________________ payroll bank account is one to which cash transfers are made in an amount exactly equal to the total net pay for the period.

ANS:imprest or clearing accounteither answer is correct

6. __________________ is the process of managing how people are hired, developed, assigned, motivated and retained.

ANS: Human capital management

7. The _____________________ process is an interacting structure of people equipment, methods, and controls that supports the decision needs of the HR department

ANS: HR management

8. The __________ process maintains data for payroll taxes, fringe benefits, attendance reporting, timekeeping, and paying employees for work performed.

ANS: payroll

9. The manager of safety, health, and human services usually reports to the _______________.

ANS: VP of HR

10. The manager of _______________ helps to settle employee complaints and grievances.

ANS: employee and industrial relations

11. The _______________ has key functions that include plans and forecasts of an organization’s short term and long term HR needs.

ANS: manager of personnel planning and staffing

12. Systems that allow employees to access personal as well as business related information and functions are known as ____________________.

ANS: self service systems

13. According to the HRM flowchart, the employee/payroll data is stored in the ____________ database.

ANS: enterprise

14. The ______________ data maintains data concerning an organization’s short term and long term staffing requirements.

ANS: labor-force planning

15. The ____________ data catalogs each employee’s set of relative skills.

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ANS: skills inventory

16. Internal audit usually reports to ____________________.

ANS: the VP of finance

17. The VP finance usually has direct supervision of the treasurer, ____________ and ___________.

ANS:controllerinternal audit

18. The GL supervisor usually reports to _______________.

ANS: the controller

19. Tax deposits are made to _____________.

ANS: the bank

20. ________________ reflect the start and stop times on specific jobs.

ANS: Job time records

21. The trigger for the payroll process “pay employees” is the _______________.

ANS: validated attendance time records

22. The data flow between “prepare paychecks” and “prepare disbursement voucher” is the ______________.

ANS: payroll register

23. The ________________ data is the central repository of data about people who work for the organization.

ANS: employee/payroll master

24. The employee wage and tax statement is known as a ________.

ANS: W-2

25. Annuities, pensions, and retirement pay are reported on Form ________.

ANS: 1099-R

26. Wages taxable under FICA are reported on Form _____.

ANS: 941


27. A (n) __________________ system is a computer based system that captures, stores, and reports time.

ANS: electronic time management

28. A company that specializes in rendering payroll services to client companies for a fee is a (n) ________________.

ANS: payroll service bureau

29. ________________ are employees who do not actually work for the company, but who receive paychecks.

ANS: Ghost employees

30. For good internal control, there should be a __________________ between personnel data creation/modification, payroll preparation, and disbursement of the checks.

ANS: segregation of duties

31. As each field of data is completed on a ________________, the cursor moves to the next field on the screen with a structured data entry process.

ANS: preformatted screen

32. The control plan _________________, entails having paychecks distributed to employees by an entity not otherwise involved in payroll processing.

ANS: independent paycheck distribution

33. A ______________ account is used to transfer the exact amount necessary to cover payroll checks and related expenses.

ANS:payroll clearing or impresteither answer is correct

34. One of the control goals of the operations process is to ensure the ____________ of operations.

ANS: effectiveness

35. One of the controls goals of the operations process is to ensure the efficient ___________ of resources.

ANS: employment

PROBLEM

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1. Figure TB-14.1 is a level 0 DFD of a payroll process, but several labels have been omitted from the figure (indicated by small boxes in the figure). Listed below is a numbered, alphabetical list of the omitted items.

Omitted Labels1. Accrue employer taxes2. Attendance time records3. Distribute labor costs4. Employee/payroll master data5. General ledger process6. GL employer tax accrual update7. GL tax deposit update8. Government agencies9. Job time records10. Pay employees11. Payroll transfer check12. Tax deposit

Required:

Match the list of labels above to the spots in Figure TB-14.1 where they belong by placing one of the numbers (1 through 12) from the above list in the appropriate box in the figure.


Gov’t Agencies

Dept Managers & supervisors

General Ledger Process

Bank

Employees

Insurance companies etc

Bank

?

?

1.0 Perform

data mainte-nance

6.0 Prepare Tax

Deposit

5.0

7.0 Prepare payroll reports

2.0 Reconcile

Hours Worked

3.0

4.0

Tax rates data

?

?

?

Payment contribution

notice

Payroll tax reports

Benefits reports

W-2 Forms

Employee paychecks ?

Employee/payroll master data

Accrual notification

GL disbursement voucher update

GL labor distribution

update

Validate job time records

Current tax rates

Validated attendance

time records

Figure TB 14.1

ANS:

346 Chapter 14

Gov’t Agencies

Dept Managers & supervisors

General Ledger Process

Bank

Employees

Insurance companies etc

Bank

8

5

1.0 Perform

data mainte-nance

6.0 Prepare Tax

Deposit

5.0

1

7.0 Prepare payroll reports

2.0 Reconcile

Hours Worked

3.0

3 4.0

10

Tax rates data

6

7

12

Payment contribution

notice

Payroll tax reports

Benefits reports

W-2 Forms

Employee paychecks 11

Employee/payroll master data

Accrual notification

GL disbursement voucher update

GL labor distribution

update

4

Validate job time records

9 or 2

2 or 9

Current tax rates

Validated attendance

time records

Figure TB 14.2


4.0 Pay Employees

Validated attendance time

records Tax rates data Employee/ payroll

master data

General Ledger

Employees Bank

GL disbursements voucher update Payroll

transfer check

Employee Paychecks

2. Figure TB 14.3 is a part of the payroll process level 0 DFD shown in the text. The narrative that follows is paraphrased from the text description of process 4.0 in the diagram.

Narrative DescriptionValidated attendance time records initiate the payment to workers in process 4.0.

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This process begins with the validated attendance time records. In calculating employees gross and net pay, the first process retrieves data from both the employee/payroll master data and the tax rates data. This process accumulates current, quarter-to-date, and year-to-date totals for each employee and reports this information via the data flow Payroll register. This information also is used to update the employee/payroll master data. Finally, this first process prints and distributes paychecks to employees as reflected in the represented by an employee paychecks data flow.

The data flow “payroll register” triggers the next process where the disbursement voucher is prepared. This will result in a data flow for the GL disbursement voucher update, and a data flow for the disbursement voucher.

Finally, the payroll transfer check is prepared in the next process and sends it to the bank to cover the organizations periodic net payroll.

Required:

From the DFD in the figure below and the narrative description above, explode bubble 4.0 into a lower level diagram showing the details of that process.

ANS:

Figure TB 14.4

3. Assume that you are working with a payroll application that produces weekly paychecks, including paystubs. Listed below are 20 data elements that appear on the paycheck/paystub.

Data Elements

Number Description1. Employee identification number2. Social security number3. Employee name4. Employee address5. Regular hours worked


6. Overtime hours worked7. Pay rate classification8. Hourly pay rate9. Regular earnings

10. Overtime earnings11. Total earnings12. Deduction for federal income tax13. Deduction for state income tax14. Deduction for FICA tax15. Union dues withheld (flat amount based on length of service)16. Net pay17. Check number (same number is also preprinted on each check form)18. Year-to-date amounts for items 11 through 14 preceding19. Pay-period end date20. Date of check (employees are paid on Wednesday for the week ended the

previous Friday)

Required:

For each numbered item, indicate the immediate (versus ultimate) source of the item. For instance, the immediate source of the number of exemptions for an employee would be the employee master file as opposed to the ultimate source which is the W-4 form filed by the employee. Some items may have more than one source, as in the case of item 1. You have the following choices:

E = Employee master fileT = Time clock cards (these are in machine-readable form and show for each

employee for each day the time punched in the morning, out at lunch,in after lunch, and out in the evening)

H = "Table" file of hourly wage rates (i.e., wage rate "class" and hourly rate for each class)

W = "Table" file of state and federal income tax withholding amounts plus FICA tax rate and annual "cutoff" amount for FICA wages.

CG = Computer generated (such as a date or time of day supplied by the system)CC = Computer calculatedCO = Console operator (such as batch totals or a date to be used)

Arrange your answer as follows:

Item Source1 T, E2 ?

etc.

ANS:Solution:

Item No. Description Source

1. Employee identification number T, E2. Social security number E3. Employee name T, E4. Employee address E

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5. Regular hours worked T, CC6. Overtime hours worked T, CC7. Pay rate classification E8. Hourly pay rate H9. Regular earnings CC10. Overtime earnings CC11. Total earnings CC12. Deduction for Federal Income Tax W, CC13. Deduction for State Income Tax W, CC14. Deduction for FICA tax W, CC15. Union dues withheld (flat amount based on

length of service)E, CC

16. Net pay CC17. Check number (same number is also preprinted

on each check form)CG, CO

18. Year-to-date amounts for items 11 through 14 above

E, CC

19. Pay period ending CG, CO20. Date of check (employees are paid on

Wednesday for the week ended the previous Friday)

CC, CO

Documents

Possible Q&A