Every March, Buddie, who owns and operates a small retail shop, takes a large box of receipts and invoices to her accountant so the accountant can file Buddie's taxes in April. Only then does Buddie know if her business has been profitable. Buddie could benefit from a(n

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter6: Merchandising Transactions

Section: Chapter Questions

Problem 2TP: You have decided to open up a small convenience store in your hometown. As part of the initial...

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Case Study: Hassam runs a fruit stall at the local market and at the end of each day he banks the cash in the cash register. the cash register records each sale and can provide a total for each day but Hassam believes that often the staffs are too busy and do not always enter the sales in the cash register but simply put the cash in the till. the total from the cash register is produced each month for the budiness's accountant to prepare financial statements. Recently, Hassam employed a university student to work on weekends and he is concerned that after this the daily amount banked seems to have decreased even though Hassam feels that sales have not really changed. the student often talks about how he spends his evenings at the casino in the hope of winning enough to pay for his university studies so that he doesn't have to work every weekend. reqiured: please answer this question by listing to Hassam 5 controls he could put in place to minimize the risk of one of his employees…
The company el Ahuehuete, S.A., shows you the data of the credit applicants. Without knowing the rules and credit policies of this company. Each case will provide conditions for you to establish minimum criteria for granting credit. Once you have reached an agreement as a team, review who would be subject to credit according to these new policies that have been established. Dinora Velázquez. Homemaker. She manages the household and budgeted monthly household expenses amount to $16,000.00. Her husband is the breadwinner; he is a maquila worker and earns $30,000.00. They have 2 elementary school age children. She has a mortgage on the house they live in, which takes 20% of her family's income. Subject to credit? Would it be good for the company to lend you credit?
The following is an excerpt from a conversation between Paula Marlo, the warehouse manager for Musick Foods Wholesale Co., and its accountant, Mike Hayes. Musick Foods operates a large regional warehouse that supplies produce and other grocery products to grocery stores in smaller communities.Paula: Mike, can you explain what’s going on here with these monthly statements?Mike: Sure, Paula. How can I help you?Paula: I don’t understand this last-in, first-out inventory procedure. It just doesn’t make sense.Mike: Well, what it means is that we assume that the last goods we receive are the first ones sold. So the inventory consists of the items we purchased first.Paula: Yes, but that’s my problem. It doesn’t work that way! We always distribute the oldest produce first. Some of that produce is perishable! We can’t keep any of it very long or it’ll spoil.Mike: Paula, you don’t understand. We only assume that the products we distribute are the last ones received. We don’t actually have to…
An accountant recommends a local computer company to a client that is trying to upgrade its computerized sales records. The client purchases $25,000 worth of equipment and sends a check to the accountant for 5 percent of the total sales. This is an example of aa. Commission.b. Contingent fee.c. Referral fee.d. Nonaudit fee.
Your friend, Wendy Geiger, owns a small retail store that sells candies and nuts. Geiger acquires her goods from a few select vendors. She generally makes purchase orders by phone and on credit. Sales are primarily for cash. Geiger keeps her own manual accounting system using a general journal and a general ledger. At the end of each business day, she records one summary entry for cash sales. Geiger recently began offering items in creative gift packages. This has increased sales substantially, and she is now receiving orders from corporate and other clients who order large quantities and prefer to buy on credit. As a result of increased credit transactions in both purchases and sales, keeping the accounting records has become extremely time- consuming. Geiger wants to continue to maintain her own manual system and calls you for advice. Write a memo to her advising how she might modify her current manual accounting system to accommodate the expanded business activities. Geiger is…
A sales representative lives in Bloomington and must be in Indianapolis next Thursday. On each of the days Monday, Tuesday, and Wednesday, he can sell his wares in Indianapolis, Bloomington, or Chicago. From past experience, he believes that he can earn $12 from spending a day in Indianapolis, $16 from spending a day in Bloomington, and $17 from spending a day in Chicago. Where should he spend the first three days and nights of the week to maximize his sales income less travel costs? Travel costs are shown in Table 2. TABLE 2 From To Indianapolis Bloomington Chicago Indianapolis 5 2 | Bloomington 5 7 Chicago 7 -
This year you obtain a new client, Lee Corporation, a regional distributor of appliances. Before becoming your client, Lee had installed a microcomputer-based accounting system to handle its receivable, payables general ledger and payroll. Lee purchases its microcomputer with off-the-shelf software and appears very pleased with it. You notice that the computer sits on the bookkeeper’s desk. You ask Christian Lee, the president, about his feelings about the computer system, and he states:“The system is absolutely great. It has already saved us a lot of time and money. I get reports when I want them, not days later. In fact, it is so good, why don’t you try it? The password is LEE. You can go ahead and use it. If you want any backup files, they are stored in the supply room. We sure saved a lot of money by purchasing the system from a mail-order operation. A system analyst wanted P15,000 to help pick the best system for us, and a local dealer wanted P11,000 more for comparable hardware…
This year you obtain a new client, Lee Corporation, a regional distributor of appliances. Before becoming your client, Lee had installed a microcomputer-based accounting system to handle its receivable, payables general ledger and payroll. Lee purchases its microcomputer with off-the-shelf software and appears very pleased with it. You notice that the computer sits on the bookkeeper’s desk. You ask Christian Lee, the president, about his feelings about the computer system, and he states: “The system is absolutely great. It has already saved us a lot of time and money. I get reports when I want them, not days later. In fact, it is so good, why don’t you try it? The password is LEE. You can go ahead and use it. If you want any backup files, they are stored in the supply room. We sure saved a lot of money by purchasing the system from a mail-order operation. A system analyst wanted P15,000 to help pick the best system for us, and a local dealer wanted P11,000 more for comparable…
Shanice works in finance for a small manufacturing company and is working on next year’s budget. She has been doing research to compare the cost of outsourcing some upcoming jobs versus the cost of purchasing the equipment to keep the jobs in-house. In what step in financial planning is Shanice involved? Multiple Choice O. developing financial statements for outside investors O. forecasting short-term financial needs O. establishing financial controls and tax policy O. forecasting long-term financial needs
You are an accounting student at Berkeley College and will not graduate for another year. But because of your excellent grades so far, you have been able to land a job in the purchasing department of a retailer. One of the purchasing agents in your company is negotiating for the receipt of a very large order of uninsured goods from a supplier. The purchasing agent is able to get a better deal on the goods if they are shipped FOB shipping point rather than FOB destination. The agent doesn’t know the difference between these two concepts. He also doesn’t understand why choosing one over the other should make any difference to the company. As a student of accounting at Berkeley College, you know well the difference between these 2 concepts and you know why one would be a better choice over the other in the case of uninsured goods. Please explain these two concepts in this discussion and tell the purchasing agent which shipping method is preferable and why.
Miss Anglea recently joined A2A Limited as an accounting clerk. As a part of financial reporting process, she receives the following source documents to prepare journal vouchers for general ledger entries. purchase orders, sales invoices, and vendor invoices At the end of each day, Angela posts the journal vouchers to the general ledger and the related subsidiary ledgers. Each month the clerk reconciles the subsidiary accounts to their control accounts in the general ledger to ensure that they balance. Required: Discuss any control weaknesses and risks associated with the accounting information system of A2A Limited. Please provide references as well.
You have decided to open up a small convenience store in your hometown. As part of the initial set-up process, you need to determine whether to use a perpetual inventory system or a periodic inventory system. Write an evaluation paper comparing the perpetual and periodic inventory systems. Describe the benefits and challenges of each system as it relates to your industry and to your business size. Compare at least one example transaction using the perpetual and periodic inventory systems (a purchase transaction, for example). Research and describe the impact each system has on your financial statements. Decide which system would be the best fit for your business, and support your decision with research.