Fundamentals of Cost Accounting
5th Edition
ISBN: 9781259565403
Author: William N. Lanen Professor, Shannon Anderson Associate Professor, Michael W Maher
Publisher: McGraw-Hill Education
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Chapter 12, Problem 19CADQ
To determine
Suggest an explanation for the excess expenses within one month of the close of the budget.
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Your supervisor tells you to change the aging category of a large account from account receivables from over 120 days to current status and prepare a new invoice to the customer with the revised date that agrees with this new category. this will change the required allowance of uncollectible accounts from $180,000 to $135,000. what is the ethical dilemma the assistant controller faces?what are the ethical considerations? consider the options and responsibilities as the assistant controller
You are tasked to perform cut-off procedures for expenses and its related payable. In testing the completeness/cut-off assertion, what document would you most likely inspect?
Group of answer choices
A. Purchase journal 15 days before and 15 days after report date.
B. Accounts payable subsidiary ledger.
C. Cash disbursement journal 15 days before and 15 days after report date.
D. Vendor invoice register 15 days before and 15 days after report date.
You are tasked to perform cut-off procedures for expenses and its related payable. In testing the completeness/cut-off assertion, what document would you most likely inspect?
Choices
Accounts payable subsidiary ledger.
Purchase journal 15 days before and 15 days after report date.
Cash disbursement journal 15 days before and 15 days after report date.
Vendor invoice register 15 days before and 15 days after report date.
Chapter 12 Solutions
Fundamentals of Cost Accounting
Ch. 12 - What does decentralization mean in the context of...Ch. 12 - Why is performance measurement an important...Ch. 12 - Prob. 3RQCh. 12 - What does dysfunctional decision making refer to?Ch. 12 - Prob. 5RQCh. 12 - What are the five basic kinds of decentralized...Ch. 12 - What is goal congruence? How is it different from...Ch. 12 - Prob. 8RQCh. 12 - What is relative performance evaluation?Ch. 12 - Prob. 10RQ
Ch. 12 - Prob. 11RQCh. 12 - Prob. 12RQCh. 12 - The management control system collects information...Ch. 12 - Salespeople are often paid a commission based on...Ch. 12 - Prob. 15CADQCh. 12 - Prob. 16CADQCh. 12 - On December 30, a manager determines that income...Ch. 12 - Prob. 18CADQCh. 12 - Prob. 19CADQCh. 12 - The manager of an operating department just...Ch. 12 - In the previous chapters, we considered different...Ch. 12 - A company has a bonus plan that states that...Ch. 12 - Prob. 23CADQCh. 12 - Prob. 24CADQCh. 12 - Prob. 25CADQCh. 12 - Prob. 26CADQCh. 12 - Prob. 27CADQCh. 12 - Prob. 28CADQCh. 12 - Prob. 29ECh. 12 - Evaluating Management Control SystemsEthical...Ch. 12 - Prob. 31ECh. 12 - Management Control Systems and Incentives A...Ch. 12 - Alternative Allocation Bases: Service Bartolo...Ch. 12 - Single versus Dual Rates Required Refer to data...Ch. 12 - Single versus Dual Rates: Ethical Considerations A...Ch. 12 - Single versus Dual Rates Using the data for the...Ch. 12 - Alternative Allocation Bases Thompson Aeronautics...Ch. 12 - Tone at the Top, Ethics Once upon a time, a major...Ch. 12 - Prob. 39ECh. 12 - Prob. 40ECh. 12 - Internal Controls Commonly in many organizations,...Ch. 12 - Evaluating Management Control Systems SPG Company...Ch. 12 - Analyze Performance Report for Decentralized...Ch. 12 - Divisional Performance Measurement: Behavioral...Ch. 12 - Cost Allocations: Comparison of Dual and Single...Ch. 12 - Cost Allocation for Travel Reimbursement Your...Ch. 12 - Incentives, Illegal Activities, and Ethics An...
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- Which of the following would not be considered an analytical procedure? a. Projecting an error rate by comparing the results of a statistical sample with the actual population characteristics. b. Developing the expected current year sales based on the sales trend of the prior five years. O c. Computing accounts receivable turnover by dividing credit sales by the average net receivables. d. Estimating payroll expense by multiplying the number of employees by the average hourly wage rate and the total hours worked.arrow_forwardthe supervisor tells you to change the aging category of a large account from over 120 days to current status and prepare a new invoice to the customer with the revised date and that agrees with the new category this will change the required allowance of uncollectible accounts from $180,000 to $135,000. What are the potential consequences if you do comply with your supervisors instructions?Who will be negatively impacted?arrow_forwardAn audit client sells 15 to 20 units of product annually. A large portion of the annual sales occur in the last month of the fiscal year. Annual sales have not materially changed over the past five years. Which of the following approaches would be most effective concerning the timing of audit procedures for revenue?a. The auditor should perform analytical procedures at an interim date and discuss any changes in the level of sales with senior management.b. The auditor should inspect transactions occurring in the last month of the fiscal year and review the related sale contracts to determine that revenue was posted in the proper period.c. The auditor should perform tests of controls at an interim date to obtain audit evidence about the operational effectiveness of internal controls over sales.d. The auditor should review period-end compensation to determine whether bonuses were paid to meet earnings goals.arrow_forward
- An auditor found that employee time records in one department are not properlyapproved by the supervisor. Which of the following could result?(1) Duplicate paychecks might be issued.(2) The wrong hourly rate could be used to calculate gross pay.(3) Employees might be paid for hours they did not work.(4) Payroll checks might not be distributed to the appropriate employeesarrow_forwardThe following misstatements are included in the accounting records of Westgate Manufacturing Company. Each month, a fraudulent receiving report is submitted to accounting by an employee in the receiving department. A few days later, he sends Westgate an invoice for the quantity of goods ordered from a small company he owns and operates in the evening. A check is prepared, and the amount is paid when the receiving report and the vendor’s invoice are matched by the accounts payable clerk. Telephone expense (account 2112) was unintentionally charged to repairs and maintenance (account 2121). Required: For each misstatement, identify the transaction-related audit objective that was not met. For each misstatement, state a control that should have prevented it from occurring on a continuing basis. For each misstatement, state a substantive audit procedure that could uncover it.arrow_forwardHealth Corporation has several current notes receivable on its year-end balance sheet. While collection seems certain, it may be delayed beyond one year. Because of this, the controller wants to re-classify these notes as non-current. Health's treasurer also thinks that collection will be delayed but does not favor re-classification because this will reduce the current ratio from 1.5:1 to 0.8:1. This reduction in current ratio is detrimental to company prospects for securing a major loan. 1. Should the controller re-classify the notes? Give reasoning. 2. Does the treasurers position pose an ethical dilemma for the controller. Explain.arrow_forward
- Which of the following is incompatible task?a. The AR clerk prepares customer statements every month.b. The inventory control clerk updated the inventory subsidiary ledger.c. The AR clerk authorizes the write-off of bad debts.d. An accounting clerk updates both AR and APsubsidiary ledgers.e. All of the above are incompatible tasks.arrow_forward6. An excerpt from an internal audit observation indicates that travel advances exceeded prescribed maximum amounts. Company policy provides travel funds to authorized employees for travel. Advances are not to exceed 45 days of anticipated expenses. Company procedures do not require justification for large travel advances. In this audit observation, the element of an audit finding known as “effect” is: Group of answer choices Advances are not to exceed estimated expenses for 45 days Unauthorized employees are given travel advances Employees accumulate large, unneeded advances Travel advances exceed prescribed maximum amountsarrow_forwardIf the factory overhead control account has a credit balance of 2,000 at the end of the first month of the fiscal year, has the overhead been under- or overapplied for the month? What are some probable causes for the credit balance?arrow_forward
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