College Accounting (Book Only): A Career Approach
12th Edition
ISBN: 9781305084087
Author: Cathy J. Scott
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Videos
Textbook Question
Chapter 2, Problem 5E
Speedy Sewing Services, owned by T. Nguyen, hired a new bookkeeper who is not entirely familiar with the process of preparing a
Expert Solution & Answer
Trending nowThis is a popular solution!
Students have asked these similar questions
Nathan Goldstien's administrative assistant maintains a very simple computerized general ledger system.
This system includes intuitive routines for recording receipts, payments, and sales on account. However,
the system is not sufficiently robust to automate end-of-period adjustments. Below is the trial balance for
the month ending January 31, 20X8. This trial balance has not been adjusted for the various items that are
described on the following page. Review the trial balance and narratives, and prepare the necessary adjusting
entries.
NATHAN CORPORATION
Trial Balance
January 31, 20X8
Debits
Credits
112,500 $
Cash
|Accounts Receivable
Prepaid Insurance
Supplies
Equipment
Accumulated
Depreciation
Accounts Payable
Unearned Revenue
Loan Payable
37,230
7,200
21,339
105,000
30,000
22,707
25,500
45,000
72,000
46,371
Capital Stock
Retained Earmings, Jan. 1
Revenues
Salary Expense
Rent Expense
Office Expense
131,985
36,294
39,000
7,500
Dividends
7,500
373,563
373,563
The following misstatements are included in the accounting records of Westgate Manufacturing Company.1. Each month, a fraudulent receiving report is submitted to accounting by anemployee in the receiving department. A few days later, he sends Westgate an invoicefor the quantity of goods ordered from a small company he owns and operates inthe evening. A check is prepared, and the amount is paid when the receiving reportand the vendor’s invoice are matched by the accounts payable clerk.2. Telephone expense (account 2112) was unintentionally charged to repairs andmaintenance (account 2121).3. The accounts payable clerk prepares a monthly check to Story Supply Company forthe amount of an invoice owed and submits the unsigned check to the treasurer forpayment along with related supporting documents that have already been approved.When she receives the signed check from the treasurer, she records it as a debit toaccounts payable and deposits the check in a personal bank account for a…
The 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.
Chapter 2 Solutions
College Accounting (Book Only): A Career Approach
Ch. 2 - Determine the balance of the following T account:
...Ch. 2 - Which of the following statements is correct? a....Ch. 2 - Prob. 3QYCh. 2 - R. Nelson invests his personal computer, with a...Ch. 2 - When preparing a trial balance, which of the...Ch. 2 - What would be the net income for Floress Catering?...Ch. 2 - On which financial statement(s) would R. Flores,...Ch. 2 - What is the amount of ending capital shown on the...Ch. 2 - Floress Catering purchased equipment that cost...Ch. 2 - Prob. 1DQ
Ch. 2 - Explain why the term debit doesnt always mean...Ch. 2 - Prob. 3DQCh. 2 - How are the three financial statements shown in...Ch. 2 - Prob. 5DQCh. 2 - List two reasons why the debits and credits in the...Ch. 2 - Prob. 7DQCh. 2 - What do we mean when we say that capital, drawing,...Ch. 2 - Prob. 1ECh. 2 - List the classification of each of the following...Ch. 2 - R. Dalberg operates Dalbergs Tours. The company...Ch. 2 - During the first month of operation, Graham...Ch. 2 - Speedy Sewing Services, owned by T. Nguyen, hired...Ch. 2 - During the first month of operations, Landish...Ch. 2 - The following errors were made in journalizing...Ch. 2 - Would the following errors cause the trial balance...Ch. 2 - During December of this year, G. Elden established...Ch. 2 - B. Kelso established Computer Wizards during...Ch. 2 - S. Myers, a speech therapist, opened a clinic in...Ch. 2 - On May 1, B. Bangle opened Self-Wash Laundry. His...Ch. 2 - The financial statements for Daniels Custom...Ch. 2 - During February of this year, H. Rose established...Ch. 2 - J. Carrie established Carries Photo Tours during...Ch. 2 - D. Johnston, a physical therapist, opened...Ch. 2 - On July 1, K. Resser opened Ressers Business...Ch. 2 - The financial statements for Baker Custom Catering...Ch. 2 - Prob. 1ACh. 2 - What Would You Say? A fellow accounting student...Ch. 2 - Prob. 3A
Additional Business Textbook Solutions
Find more solutions based on key concepts
Determine the estimated cost of the work performed each week given the tasks—with their associated costs and sc...
Construction Accounting And Financial Management (4th Edition)
BE1-7 Indicate which statement you would examine to find each of the following items: income statement (IS), ba...
Financial Accounting: Tools for Business Decision Making, 8th Edition
Fundamental and Enhancing Characteristics. Identify whether the following items are fundamental characteristics...
Intermediate Accounting
Dave Nelson recently retired at age 48, courtesy of the numerous stock options he had been granted while presid...
Managerial Accounting: Creating Value in a Dynamic Business Environment
Place the letter of the appropriate accounting cost in Column 2 in the blank next to each decision category in ...
Fundamentals Of Cost Accounting (6th Edition)
This year, Prewer Inc. received a 160,000 dividend on its investment consisting of 16 percent of the outstandin...
Principles Of Taxation For Business And Investment Planning 2020 Edition
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Mark Brown operates a Nursery in her district and has been having difficulties preparing heraccounts for the year-end financial statements. The Trial Balance did not balance as the debitshave exceeded the credits by $1780. A Suspense Account was open for the difference. Thefollowing errors were found after closer inspection:i. The Purchases Day Book had been overcast by $1100ii. $2350 received from the sale of old furniture had been entered in the Sales Account.iii. A cheque of $1950 from T. Cruise was accidentally credited to T. Crane’s account.iv. A private purchase of $2400 had been included in the business purchases.v. Bank charges of $1220 entered in the Cash Book have not been posted to the BankCharges Account.vi. A sale of goods to S. Black for $2300 was correctly entered in the Sales Day Book butentered in the personal account as $4200 Write up the Suspense Account to clear the difference. Show the journal entries necessary to correct the errors The net profit previously…arrow_forwardYou have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance. After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category. This will change the required allowance for uncollectible accounts…arrow_forwardYou have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance. After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category. This will change the required allowance for uncollectible accounts…arrow_forward
- You have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance.3.What is the ethical dilemma you face? What are the ethical considerations? Consider your options and responsibilities as assistant controller.4.Identify the key internal and external stakeholders. What are the negative impacts that can happen if you do not follow the instructions of your supervisor?5.What are the…arrow_forwardYou have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance. After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category. This will change the required allowance for uncollectible accounts…arrow_forwardYou have been recently hired as an assistant controller for XYZ Industries, a large, publically held manufacturing company. Your immediate supervisor is the controller who also reports directly to the VP of Finance. The controller has assigned you the task of preparing the year-end adjusting entries. In the receivables area, you have prepared an aging accounts receivable and have applied historical percentages to the balances of each of the age categories. The analysis indicates that an appropriate estimated balance for the allowance for uncollectible accounts is $180,000. The existing balance in the allowance account prior to any adjusting entry is a $20,000 credit balance. After showing your analysis to the controller, he tells you to change the aging category of a large account from over 120 days to current status and to prepare a new invoice to the customer with a revised date that agrees with the new category. This will change the required allowance for uncollectible accounts…arrow_forward
- After a recent computer crash, the accountant salvaged the following Trial Balance which was saved before proofing for errors. While all the account titles and account balance amounts are correct, some of the balances are not listed in the proper order or Debit/Credit columns. After making the necessary corrections, what is the correct balancing totals for this Trial Balance? Los Rolano, DESIGNER Trial Balance November 30, 2017 Account Title Balance Debit CreditCash $ 7,410Accounts Receivable $1,300Office Supplies 500Prepaid Insurance 2,400Furniture 1,500Land…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. Identify the key internal and external stakeholders. what are the negative impacts that can happen if you do not follow the instructions of the supervisor?arrow_forwardMs. Noor is an Account Assistant of a Merchandise business in Oman. The business paid monthly salaries to all employees of OMR 7000. Ms. Noor was asked to record the transaction. But due to her busy schedule she forgot to record the entire transaction. The type of Error was committed by Ms. Noor: a. Error of Principle b. Error of Transposition c. Error of Partial Omission d. Error Complete Omissionarrow_forward
- What Would You Do? A new bookkeeper cant find the errors that are causing the companys month-end trial balance to be out of balance. The bookkeeper is too shy to ask for help at the office, so she takes the financial records home and asks her uncle, a retired bookkeeper, to help her locate the errors. Even with the help of her uncle, the trial balance is still out of balance, and now she is too embarrassed to return to the office and ask for help. The bookkeeper decides to show the trial balance is in balance and hope no one notices. Explain if there is anything wrong with this practice.arrow_forwardSusan, a store supervisor, is responsible for creating a summary of the store’s transactions at the end of each day. She is also responsible for checking the register tape against the credit slips and cash in the register, and then depositing the money in the morning. Susan recently took on a new role as head bookkeeper, when the former one retired. Susan would occasionally change a transaction on the register and pocket the extra money. Now, she waits until the end of the year for the store manager to go on holiday break. She writes a check for herself in the amount of an invoice, then cancels the check originally written to pay for the invoice. She cashes the check for herself, and waits a few weeks before resubmitting the invoice. When the owner writes the second check, Susan records this in the cash disbursements journal, and then deposits the check. She then files it with all other paid invoices. Susan has been following this practice successfully for several years and feels…arrow_forwardAn employee working on her first trial balance discovers that the Equipment account has a credit balance of $2500 and a customer's A/R account has a credit balance of $25. Based on the knowledge you have gained in this course and how account balances are recorded and increase/decrease, has the accountant made a mistake in her records or are these situations possible?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College Pub
College Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781305084087
Author:Cathy J. Scott
Publisher:Cengage Learning
Accounting Changes and Error Analysis: Intermediate Accounting Chapter 22; Author: Finally Learn;https://www.youtube.com/watch?v=c2uQdN53MV4;License: Standard Youtube License