The Purpose of Segregating the Duties of Distributing Payroll Checks

question 33

Multiple Choice

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

• A)Separate the custody of assets from the accounting for those assets.
• B)Establish clear lines of authority and responsibility.
• C)Separate duties within the accounting function.
• D)Separate the authorization of transactions from the custody of related assets.

---

Definitions:

Intraperiod Tax Allocation

The allocation of tax expense or benefit among different components of comprehensive income, such as operating income and other comprehensive income.

Deferred Tax Assets

Financial assets that result from differences between the tax base of assets or liabilities and their carrying amount in financial statements, which will result in deductible amounts in future periods.

Deferred Tax Liabilities

A tax obligation recorded on a company's balance sheet that results from temporary differences between the tax basis of assets or liabilities and their reported amount in the financial statements.

Deferred Tax Assets

Financial items on a company's balance sheet that reduce future tax liability due to temporary differences between the accounting and tax treatment of assets and liabilities.