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AU / Accounting / ACCT 3310 / When to update the master file?

When to update the master file?

When to update the master file?

Description

School: Auburn University
Department: Accounting
Course: BUSINESS PROCESSES AND INTERNAL CONTROLS
Professor: Duane brandon
Term: Spring 2016
Tags: BPIC, business, Processes, and, internal, and Controls
Cost: 50
Name: Test 2 Notes
Description: These notes cover in class lectures, powerpoint notes, and notes from the book.
Uploaded: 02/26/2017
8 Pages 32 Views 3 Unlocks
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When to update the master file?



employment of personnel

end- periodic payment recording of the payments

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Key control → segregation of duties Payroll part of purchases + cash disbursements cycle

> receipt of employment services - Similar to receiving services from

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When to update the tax rate?



outside repairmen or consultants

Differences:

- employees are more long term.

huge area for fraud

- tax withholding benefits require

special consideration - Seperate bank account & joumal

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purchase * cash disbursements

are close in time immediate pay yo

2 subcycles


How to calculate employee-paid benefits and taxes?



most of the action Receipt + payment of employee services (transactions change account Payroll accruals → [taxes)

loolance

of all the Steps If you want to learn more check out What is the mineral class?

happens whenever it needs to

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* 1.0 Master File (controlled by human resources) (not payroll) independens > updating master file - new hires, terminatons, changes in pay

rates, or withholdings ? Do not delete employees who quit lare terminated

Timely updating

* unauthorized changes to If you want to learn more check out How will the movement of water affect a cell if it is transferred from a hypotonic solution to a hypertonic solution?

master file KEY CONTROL- segregati If you want to learn more check out How do you calculate compound return?

COUP of duties 2.0 Update Tax Rates & Deductions ( IT people might do this)

Don't change very often - however often tax laws change IRS +state gov. publish withholding tables

W4 -

MEJ how many exemptions? tall people

MFS HOH

Ow

How much tax they will withold from you Don't forget about the age old question of Can you sue for abuse of process?

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employ

b

Services

pold be

Every time you pay an

3,4,5 happen mc you pay an employee Recei 3.0 validate time y ahendance data

time in time out Pald bounty-time card inaccurate time? pay might be linked w! sales production system

data-time Clocks, incentives commissions bonuscs reconcilitanon ottimo Worked NS. won performed Don't forget about the age old question of What is the main cause for agents of transport like water or wind to deposit sediments?

> have to calculate compe

acato compensation - compensation

Shovlof bcaligned wl corporate objective

2

14.0

4.0

pay for

Prepare payroll > one process - batch mode

employed services

b payroheck

wage expense Gross pay calculated - Chours x rate) (salary) pay peria - Deductions

Deductions → payron tax witholdings - Federal, state, locals) We also discuss several other topics like How do childhood growth and age of sexual maturity differ between chimps and humans?

payroll tax witholdi

FICA medicare

social security

-

check to

turned

others

poyales

voluntary de ductions -pension plans, in

pension pians, insurance

poychecks

premium, union dues

net pay → payroll check

Ons

no

* inacuurate processingot

payroll cross footing payroll register, payroll cleaning 1 account batch totals

miscalciaty

Yroll register- list of

15,0 Disburse payroll

- Large companies - check amount prepared + sent to Alp

(for cash disbursement Disbursement voucher authorizes funds transfer

regular bank account → payroll account

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* Theft or fraudulent dis mbution of paychecis safeguarding of assets check.),

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prenumbered, bank reconcilianen, payroll cleaning secount

timprest fraud) *

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+

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delete

1

every year s If your employees get laid off alor

you get a new rate

high to

lunemploymen

Temploy never laid o H

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low rate

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ongionally > Givenmiddlerate

Payroll tax expense

FICA medicare Happens whenever you accrue

FUTA

6.0 Calculate Employer Paid Benefits + Taxes

Employer must pay Social Security in addition to amount withheld from employee → matching amounts

A SUTA

paid Carterug

&

Dont have to happen out mesame

- Federal Estatc unemployment tax 5Sometimes insurance, retirement, etc.

7.0 DIS burse payroll taxes + miscellaneous deductions

bs Government agencies specifiy timing of payments of payron taxes

(for Withheld amounts temployer paid amounts)

> All voluntary deductions must be disbursed to the various organizations.

Imprest fund

one in flow tone outflow (cash receipt + cash disburse

how company controls the payroll cash baiance stays the same at end of penod always

FITW, FICA/ Medicare

for employee & employer

due 45th after month ended

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nappen

Assertions

wrotedown actually

Occurence - Did each paycheck go to

Did each paycheck go to a valid employee

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Conc that worked earned a pay on

pay check)

Crecord) Completeness. - Did we pay document ne pay of cach It pay is way too low (not usually a concern- employee will

Does each timecard used map to a paycheck:

pay of cach employec?

employee will say something if not paid

Sy

Authorization were hours approved?

Are updates to master file acpropnare?

Ralses, adding to master list

penses fined pe nods

Cutoff - Has payroll been accred appropriately to accou

eamed/paid in seperate periods?

Accived appropriately to account for pay

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si

Classification - Employee or subcontractor

Direct/indirect labor? Cincorrect labor assignment could lead to incorrect

ctor

COGS/ Inventory amounts)

Direct

labor

manager

other

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Accuracy • Did we calculate payroll and associated transactions

correctly?

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(Government very słuct w/ this)

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delete

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&

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Focus on Posting, Summarizanon, and Ajusting Entries

Transaction life cycle

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on

cel

prepare documents → invoice , PO, check, etc. -record in journals (special, general).

+ subsidianp led.gers - Post to ledgers (from the journals)

month

end

Unadjusted Trial Balance

Year

end

- Adjusting Entries. - Adjusted Trial Balance - Prepare financial statements - Prepare closingentes

Cour product)

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Post to ledgers (from the journal).

Journal Entries are posted → GIL gets updated

- Routine data posted from special jormais

Controller + Treasurer post non-routine data (gencral journal)

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Special journals are footed/cross-footed - totals posted to general ledger

General journal + other column from special journals + posted one line at a time

Seach, alla

one

Seperately

posted

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Unadjusted Trial Balance

After all journals are posted : Layso GIL accounts toraled and transferred to 12-column worksheet

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y not present anymore

y computer programs

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Adjusting Entries

Affect Bs & IS

>

Debits - Credits

adjusting entries recorded in gcncralome

each cniny is Scpcraic

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Prepaid expense (A) Accrued expense'* interest expense

Payroll tax expense capne at month end) Uncamed revenue (L) Estimates & Bad Debt inct sales method)

Federal income tax - Need Net Income (wait) Depreciation

Inventory adjustment (periodic)

Waren's adjustag entry- Payroll and cash

(part of month end)

use 365 days

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Inventory adjustment + O Find ending inventory 191,961

Inventory (force to eneling ) © Get purchases, returns, discounts so

force

freight in

Ceredit PLUG * coGs (debit) to get it to balances

& debit

ruoto

credit

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Bank

Adjusted Trial Balance - adjusted entries + balances in all accounts are updated to the Adjusted

Trial Balance

1 Adjustments posted to all

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financial Statements

- Amounts from Adjusted Trial Balance --> transferred to IS and BS

Difference between Debits &

credits

-

Net Income

Net Income

estimate Federal income Tax

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then a final adjusting entry is made, all columns totaled again, including the tax entry

Prepare closing entes

Ils accounts closed to income Summary Then closed to retained Earnings

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0

esc

500

504

Assertions

mions surrounding the cis

elated to BALANCE

icoger

Existence -

all transaction on FIS-> ng sted on any statement EXISTS

monon FIS - Journaleniny -

Every

no

D valy

documents

agoon istimecards - 15 paychecks.

like occurence (transactions)

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Control achtos that

cash

?

building, inventory there, belongs to company

to neip existence

Tabor /costs

COTYCCE

AIR

?

Used up

Inventory

allreadwrote

Tready wetten

completeness - everything that should be included is inciva

In

even thing we have has made it

control activines

eremthing.

WP

we have is

wateensed

Inventona

2. Visit ours ?)

physical check

Payables

Kights + Obligations - Entity has right to ownership the assets

ght to ownership the assets and all

COUP habilthes are recognized on the BIS

Valvation an accounts are valued appropriately (somenmes acerracy)

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everything on Bls is at the correct amount

.

5

Adjusting Entnes

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PPE Inventory

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AIR

Cash

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Investments

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