Which of the Following Internal Control Objectives Is Likely to Be

question 6

Multiple Choice

Which of the following internal control objectives is likely to be a larger concern in the audit of the payroll cycle?

• A)Payroll transactions are properly disclosed.
• B)Recorded payroll transactions are valid.
• C)Payroll transactions are recorded in the appropriate time period.
• D)All payroll transactions have been recorded.

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Definitions:

Cumulative Discounts

Price reductions based on the volume or quantity of items purchased over time.

Noncumulative Discounts

Price reductions that are offered on a one-time basis and do not accumulate over time or through additional purchases.

Inventory Carrying Costs

The expenses associated with holding and storing unsold goods or materials, including warehousing, insurance, and spoilage.

Trade Discount

A reduction in the listed price of goods or services offered to traders in the same industry, often as a bulk buying incentive.