Answered: Which of the following controls would…

Business

Accounting

Which of the following controls would be most effective in detecting this problem prior to distributing the paychecks?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter2: Income Tax Concepts

Section: Chapter Questions

Problem 48P

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Concept explainers

Employer Pension Plan

An employer pension plan is a retirement benefit provided by an employer to employees before or after they retire. Over the course of the employees' working lives, the employer should invest a lump sum or make monthly contributions to investment schemes in employees' names. It is the employer's legal responsibility to provide employees with retirement plans that support them with guaranteed financial security in retirement.

Question

Choose only one answer as well as state their reasons/rationale for the answer chosen.

1) An employee who is paid a salary of $50,000 submitted a request to deduct $50 per paycheck in voluntary deductions to a pension plan. The next weekly paycheck was for a net amount of $50. The employee was furious. Which of the following controls would be most effective in detecting this problem prior to distributing the paychecks?
a. Financial total
b. Size check
c. Limit check
d. Reasonableness test
e. Record count

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