Which of the Following Is a Major Control Risk in the Payroll

question 155

Multiple Choice

Which of the following is a major control risk in the payroll area?

• A)theft of inventory by staff
• B)fictitious persons cashing paychecks
• C)expenses being recorded as assets in order to manipulate earnings
• D)contracts being awarded to relatives of employees

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Definitions:

Consumer Debt

Debt that is incurred by an individual primarily for personal, family, or household purposes.

Bankruptcy Proceedings

The legal process through which individuals or entities unable to pay their debts can seek relief from some or all of their financial obligations.

Insolvent

The condition of being unable to pay debts as they fall due, or having liabilities that exceed assets.

Preferential Payment

A payment made to a creditor before bankruptcy that unfairly prioritizes that creditor over others, which can be reclaimed by the bankruptcy trustee.