Which of the Following Procedures Would Be Most Useful in Determining

question 54

Multiple Choice

Which of the following procedures would be most useful in determining the effectiveness of a company's internal controls regarding the existence or occurrence of payroll transactions?

• A)Observe the segregation of duties concerning personnel responsibilities and payroll disbursement.
• B)Inspect evidence of accounting for prenumbered payroll checks.
• C)Recompute the payroll deductions for employee fringe benefits.
• D)Verify the preparation of the monthly payroll account bank reconciliation.

---

Definitions:

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including the cost of the materials and labor used to create the product.

Inventory Turnover

A measure illustrating the frequency at which a firm's stock is sold and replenished within a specific timeframe, showcasing the effectiveness of managing inventory.

Low Ratio

A financial metric that indicates a ratio lower than industry norms, often suggesting less risk or lower performance in certain contexts.

IRS Guidelines

The rules and regulations issued by the Internal Revenue Service governing the tax process in the United States.