The Purpose of Segregating the Duties of Hiring Personnel and Distributing

question 16

Multiple Choice

The purpose of segregating the duties of hiring personnel and distributing payroll checks is to separate the:

• A)Authorization of transactions from the custody of related assets
• B)Operational responsibility from the record keeping responsibility
• C)Human resources function from the controllership function
• D)Administrative controls from the internal accounting controls

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Definitions:

Overhead Cost

The ongoing, general business expenses not directly tied to producing goods or services but necessary for running the business.

Traditional Costing

A costing method that assigns factory overhead to products based on volume-related measures such as direct labor hours or machine hours.

Product B

A generic term used to differentiate one product from another in a specific context, often used for analysis, comparison, or as an example.

Direct Labor-Hours

The total hours of labor directly involved in manufacturing a product, often used as a basis for allocating overhead costs.