Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Question
Chapter 4, Problem 4.41AP
To determine
To identify: The internal control weaknesses in I Imports’ System, state the losses to the company due to the weaknesses, and recommend procedures to control weakness
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
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…
Fraud in Purchasing. Consider the following scenario:Adam worked for the local hardware store as an outside sales representative. His job wasto visit local companies and contractors in an attempt to identify their needs for tools andmaterials and provide a bid to supply those items. When a local contractor accepted a newjob, Adam would get its material requirements, come back to the store, and prepare and submit a proposal for the items. After some initial success with Big Builder, a large contractor,the number of jobs awarded to Adam had decreased dramatically.One day, Adam was back at the store after losing a bid to Big Builder when he noticedsomeone in the store purchasing the exact items and quantities that were in the specificationfor that bid. The combination of items was unusual, and it would be an unlikely coincidencefor someone else to want such a combination in that exact quantity. The customer paid theretail price for the merchandise and left.Adam decided to contact Big…
Iris Plant owns and operates three floral shops in Magnolia, Texas. The accounting functions are performed manually. Each of the shops has a manager who oversees the cash receipts and purchasing functions for the shop. A clerk at the central shop pays all the bills and also prepares payroll checks and maintains the general journal. Iris is seriously considering switching to a computerized system. With so many information system packages on the market, Iris is overwhelmed. Advise Iris as to which business modules you think her organization could find beneficial. Discuss advantages, disadvantages, and internal control issues.
Chapter 4 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 4 - Prob. 1QCCh. 4 - Prob. 2QCCh. 4 - Prob. 3QCCh. 4 - Prob. 4QCCh. 4 - Prob. 5QCCh. 4 - Prob. 6QCCh. 4 - Prob. 7QCCh. 4 - Why does cash require some specific internal...Ch. 4 - Prob. 9QCCh. 4 - Prob. 10QC
Ch. 4 - Prob. 11QCCh. 4 - Prob. 12QCCh. 4 - Prob. 4.1ECCh. 4 - Prob. 4.1SCh. 4 - Prob. 4.2SCh. 4 - (Learning Objective 2: Describe objectives and...Ch. 4 - Prob. 4.4SCh. 4 - (Learning Objective 2: Explain the objectives and...Ch. 4 - (Learning Objective 3: Evalue internal controls...Ch. 4 - Prob. 4.7SCh. 4 - Prob. 4.8SCh. 4 - Prob. 4.9SCh. 4 - Prob. 4.10SCh. 4 - Prob. 4.11SCh. 4 - Prob. 4.12SCh. 4 - Prob. 4.13SCh. 4 - Prob. 4.14SCh. 4 - Prob. 4.15AECh. 4 - Prob. 4.16AECh. 4 - Prob. 4.17AECh. 4 - Prob. 4.18AECh. 4 - Prob. 4.19AECh. 4 - Prob. 4.20AECh. 4 - Prob. 4.21AECh. 4 - Prob. 4.22BECh. 4 - Prob. 4.23BECh. 4 - Prob. 4.24BECh. 4 - (Learning Objectives 1, 2, 3: Describe fraud and...Ch. 4 - Prob. 4.26BECh. 4 - Prob. 4.27BECh. 4 - Prob. 4.28BECh. 4 - Prob. 4.29QCh. 4 - Prob. 4.30QCh. 4 - Prob. 4.31QCh. 4 - Prob. 4.32QCh. 4 - Prob. 4.33QCh. 4 - Prob. 4.34QCh. 4 - Prob. 4.35QCh. 4 - Prob. 4.36QCh. 4 - Prob. 4.37QCh. 4 - Prob. 4.38QCh. 4 - Prob. 4.39QCh. 4 - Prob. 4.40QCh. 4 - Prob. 4.41APCh. 4 - Prob. 4.42APCh. 4 - Prob. 4.43APCh. 4 - Prob. 4.44APCh. 4 - Prob. 4.45BPCh. 4 - (Learning Objectives 2, 3: Explain the objectives...Ch. 4 - (Learning Objective 3: Evaluate internal controls)...Ch. 4 - Prob. 4.48BPCh. 4 - Prob. 4.49CEPCh. 4 - Prob. 4.50CEPCh. 4 - Prob. 4.51SCCh. 4 - Prob. 4.52DCCh. 4 - Prob. 4.53DCCh. 4 - Prob. 4.54EICCh. 4 - Prob. 1FFCh. 4 - Prob. 1FA
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
- 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.arrow_forwardArcontica Classic Furniture (ACF) manufactures a range of rustic chairs, lawn furniture, and interior furnishing including lamps, desks, and bed frames. ACF's customer base comprises both private customers and retail outlets. Consumer's sales are for cash or by credit card, but business customers are for cash or by credit card, but business customers are extended a line of credit. New business customers undergo a credit check before receiving a credit line. All sales are made online, by fax or mailed in hard copy order. When a credit order is received, the sales clerk verifies inventory availability, prepares a sales order, and sends the stock release copy to the warehouse clerk who picks the goods and arranges shipment. He then prepares the bills of lading and sends copies of the shipping notices to the billing department and inventory control. The billing department updates the sales journal and sends an invoice to the customer. The clerk then sends the shipping notice to the AR…arrow_forwardCase scenario: You are a newly hired accountant for Sushi Beeber, Inc., a retail company specializing in apparel for small pets. The company would like to expand its apparel line to include sweaters for cats. Sushi Beeber has found several manufacturers that offer competitive prices to ensure cost of goods sold is low. Because the company receives merchandise from different manufacturers and the cat sweaters will be commoditized, the company needs to develop an internal accounting system to keep track of inventory cost. You think that the weighted average cost method may help the company stay up-to-date with the inventory cost as purchase cost changes over time. Your task is to create a spreadsheet that can calculate the inventory cost based on purchases and sales for the month. SEE ATTACHED for Numbers Find the inventory total cost and weighted average cost for the month, i.e., all of the records of data. Enter values for the next eight rows, Row 3 through 10, in the table below. Do…arrow_forward
- JC Company sells various merchandize ( building materials, stationery, house hold goods, and assortd groceries) to the general public and government workers on both cash and credit basis. You are a student at one of the universities and the sole trader for JC Company approaches you to write a company profile for him.arrow_forwardArcontica Classic Furniture manufactures a of rustic chairs, lawn furniture, and interior purnishing including lamps, desks and bed frames. AFC's customer base comprises both private customers and retail outlets. consumer's sales are for cash or by credit card, but business costumers are for cash or by credit card, but business costumers are extended by a line of credit. New business customers undergo a credit check before receiving a credit line. All sales are made online by fax or mailed in hard copy order. When a credit order is received, the sales clerk verifies inventory availability, prepare a sales order, and sends stock release copy to the warehouse clerk who picks the goods and arranges shipment. He then prepares the bills of lading and sends copies of the shipping notices to the billing department and inventory control. The billing department update the sales journal and sends an invoice to the customer. The clerk then sends the shipping notice to the AR department where…arrow_forwardJason Stedman is the director of finance for Burton Manufacturing a US based manufacturer of handheld computer systems for inventory manangement. Burton's system combines a low-cost active tag that is attached to inventory items (the tag emits an extremely low grade radio frequency) with custom designed hardware and software that tracks the low greade emissions for inventory control. Burton has completed the sale of an inventory manangement system to a British Fire, Pegg Metropolitan (UK), for a total 1,300,000., The exchange rates shown in the table were availiable to Burton on the dates shown, corresponding to the events of this specific export sale. Assume each month is 30 days Date Event Spot Rate ($/L) Forward Rate($/L) DaysFrwrd Feb 1 price quotation for Pegg 1.7799 1.7717 210 Mar 1 Contract signed for sale 1.7497 1.7422 180 contract amount pounds 1,300,000…arrow_forward
- Anna wires money from her bank account to her brother Garin in Australia for a fee of $35. The role of her bank is that of Group of answer choices miner blockchain participant intermediary payeearrow_forwardAndria Mullins, financial manager of Webster Electronics, has been asked by the firm's CEO, Fred Weygandt, to evaluate the company's inventory control techniques and to lead a discussion of the subject with the senior executives. Andria plans to use as an example one of Webster's "big ticket" items, a customized computer microchip which the firm uses in its laptop computer. Each chip costs Webster P200, and in addition it must pay its supplier a P1,000 fee on each order. Further, the minimum order size is 250 units; Webster's annual usage forecast is 5,000 units; and the annual carrying cost of this item is estimated to be 20 percent of the average inventory unit cost. Andria plans to begin her session with the senior executives by reviewing some basic inventory concepts, after which she will apply the EOQ model to Webster's microchip inventory. Question: Would the minimum order size of 250 units be the most beneficial quantity the company must order?arrow_forwardAnna Financial Services Inc., located in Araneta Center, Cubao City, is a company that provides financial advice to individuals and small to mid-sized businesses. Its primary operations are in wealth management and financial advice. Each client has an account where basic personal information is stored on a server within the main office in Cubao City. The company also keeps the information about the amount of investment of each client on a separate server at its data center in Ayala, Makati City. This information includes the total value of the portfolio, type of investments made, the income structure of each client, and associated tax liabilities. In the last few years, larger commercial banks have started providing such services and are competing for the same set of customers. Anna, which prides itself in personal consumer relations, is now trying to set up additional services to keep its current customers. It has recently upgraded its Website, which formerly only allowed clients to…arrow_forward
- A visiting American executive discovers that a foreign subsidiary in Bangladesh has employed a 12-year-old girl in violation of the company's policy against child labour. He instructs the local manager to find a replacement for the child and send her back to school. The local manager informs the American executive that the child is an orphan with no other means of support; if she is denied employment, she will likely become a street child. EXPLAIN HOW set up a residential school CAN against child labour IN minimise the negative consequences AND maximise the benefits for all stakeholdersarrow_forwardThe goal of this problem is to identify and implement the proper internal controls on the following scenario. Give lengthy responses to each question. Tim just recently opened a pet store. He sells pet food, toys, and everything else a pet owner needs to keep their pets happy. He hired a bunch of employees to help him run his shop. As of today he only collects cash from his customers. During business hours he keeps most of the cash in the front desk drawer. After he closes, he counts the money puts in an envelope keeps the money at his desk drawer in the back office. He keeps the back office locked unless he sends one of his employees in the back office to get supplies or cash when they run out at the front desk. At the end of the month Tim deposits the money in the bank. 1. What kinds of internal controls should Tim implement to protect the cash at his pet shop? Explain how each internal controls would protect cash. 2. Why is so important for Tim or any company to implement…arrow_forwardB. Harper is surfing the Internet and finds a great pair of rollerblades at a really low price, but he has never heard of the company and is concerned that the product he ordered may not be the product he receives. Harper may be more willing to place an order with this company ifa. The website displays the WebTrust seal.b. The company provides its annual report and the report of the independent auditors on its website.c. The company provides a money-back guarantee.d. Only a partial payment is required prior to receiving the product.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Business Its Legal Ethical & Global EnvironmentAccountingISBN:9781305224414Author:JENNINGSPublisher:Cengage
Business Its Legal Ethical & Global Environment
Accounting
ISBN:9781305224414
Author:JENNINGS
Publisher:Cengage