The Key to Preventing Unauthorized Changes to the Payroll Master

question 14

Multiple Choice

The key to preventing unauthorized changes to the payroll master file is

• A) hiring totally honest people to access and make changes to this file.
• B) segregation of duties between the preparation of paychecks and their distribution.
• C) segregation of duties between the authorization of changes and the physical handling of paychecks.
• D) having the controller closely review and then approve any changes to the master file.

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Definitions:

Ledger

A comprehensive collection of accounts that records all financial transactions of a business, serving as the principal book for accounting.

Trial Balance

An accounting report that lists the balances of all ledger accounts to ensure that debits equal credits, used for internal checks.

Owner's Drawings

Owner's disbursements from a business in either a sole proprietorship or partnership for personal expenditures.

Salaries and Wages Expense

The total amount spent by a business on its employees' salaries and wages during a specific period.