CHAPTER 15 The Human Resources Management and Payroll Cycle

Question 1

1. Which of the following is not a task performed by the human resource management/
payroll cycle?
a. recruiting and hiring new employees 
b. training
c. job assignment 
d. access right management

Answer 1

d. access right management (Correct. This is not a task of the HRM/payroll cycle.)

Question 2

2. Which of the following is not a general threat to the HRM/payroll cycle?
   a. inaccurate employee master data
   b. unauthorized disclosure of sensitive information
   c. the loss or destruction of master data
   d. poor product design

Answer 2

d. poor product design (Correct. This causes no threat to the HRM/payroll cycle.)

Question 3

3. Which document lists the current amount and year-to-date totals of gross pay, deductions,
and net pay for one employee?
a. payroll register 
b. time card 
c. paycheck 
d. earnings statement

Answer 3

d. earnings statement (Correct. The earnings statement attached to each paycheck provides
the information listed.)

Question 4

4. The HRM department is responsible for updating the payroll master database for internally
   initiated changes related to employment.
   a. True.
   b. False

Answer 4

a. True. (Correct. Updating the payroll master database reflects various types of internally
initiated changes: new hires, terminations, changes in pay rates, or changes in
discretionary withholdings.)

Question 5

5. Use of a payroll service bureau or a PEO provides which of the following benefits?
   a. fewer staff needed to process payroll
   b. lower cost of processing payroll
   c. less need for developing and maintaining payroll tax expertise
   d. all of the above

Answer 5

d. all of the above (Correct.)

Question 6

6. Many companies use a \_\_\_\_\_\_\_\_\_ to record daily arrival and departure times of employees,
who are paid on an hourly basis.
a. time card 
b. time sheet 
c. punch card
d. entry card

Answer 6

a. time card (Correct. A document that records the employee’s arrival and departure times
for each work shift.)

Question 7

7. Which department should have responsibility for authorizing pay-rate changes?
   a. timekeeping
   b. payroll
   c. HRM
   d. accounting

Answer 7

c. HRM (Correct. HRM has no other role in the payroll process.)

Question 8

8. To maximize effectiveness of internal controls over payroll, which of the following persons
   should be responsible for distributing employee paychecks?
   a. departmental secretary
   b. payroll clerk
   c. controller
   d. departmental supervisor

Answer 8

a. departmental secretary (Correct. This person has no other payroll duties so cannot conceal
theft of paychecks.)

Question 9

9. Where should unclaimed paychecks be returned?
   a. HRM department
   b. cashier
   c. payroll department
   d. absent employee’s supervisor

Answer 9

b. cashier (Correct. This permits funds to be quickly redeposited.)

Question 10

10. Which of the following is an important supporting document to authorize the transfer of
funds to the payroll bank account?
a. earnings statement 
b. time card 
c. payroll register 
d. W-2 form

Answer 10

c. payroll register (Correct. This document summarizes the amount to be paid to each
employee and is sent to the accounts payable department for use in preparing a
disbursement voucher to authorize the transfer of funds to the payroll account.)