An Auditor Vouched Data for a Sample of Employees in a Payroll

question 109

Multiple Choice

An auditor vouched data for a sample of employees in a payroll register to approved clock card data to provide assurance that

• A)payments to employees are computed at authorized rates.
• B)employees work the number of hours for which they are paid.
• C)separation of duties exists between the preparation and distribution of the payroll.
• D)internal controls relating to unclaimed payroll checks are operating effectively.

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Definitions:

Minimum Efficient Scale

The smallest scale of production at which long-run average total costs are minimized.

Long Run Average Cost Curve

A graphical representation that shows the lowest average cost at which any given level of output can be produced in the long run.

Decreasing-cost Industry

An industry where the costs of production decrease as the industry grows due to economies of scale.

Long-run Equilibrium

A state in which all factors of production and outputs are fully adjusted to economic conditions, leading to stable prices and optimal resource allocation.