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Transactions that can be measured in dollars and cents are recorded in the financial
information system.
Answer:
An error in the physical count of goods on hand at the end of a period resulted in a
$15,000 overstatement of the ending inventory. The effect of this error in the current
period is
Answer:
Correcting entries are made any time an error is discovered even though it may not be
at the end of an accounting period.
Answer:
Joe Foss has worked for Dr. Sam Milton for several years. Joe demonstrates a loyalty
that is rare among employees. He hasn't taken a vacation in the last three years. One of
Joe's primary duties at the medical office is to open the mail and list the checks
received. He also takes cash from patients at the cashier window as patients leave. At
times it is so hectic that Joe doesn't bother with giving each patient a receipt for the cash
paid on their accounts. He assures them he will see to it that they receive the proper
credit. When the traffic is slow in the office, Joe offers to help Ann post the payments to
the patients' accounts receivable. She is always happy to receive his help, because he is
a very conscientious worker.
Instructions
Identify any principles of internal control that may be violated in this medical office
situation.
Answer:
At the end of an accounting period, all revenue and expense accounts are closed to a
temporary account called ______________.
Answer:
Newton Company has the following accounts in its general ledger at July 31: Accounts
Receivable $40,000 and Allowance for Doubtful Accounts $2,500. During August, the
following transactions occurred.
Oct. 15 Sold $15,000 of accounts receivable to Fast Factors, Inc. who assesses a 3%
finance charge.
25 Made sales of $800 on VISA credit cards. The credit card service charge is 2%.
Instructions
Journalize the transactions.
Answer:
A company uses the periodic inventory method and the beginning inventory is
overstated by $7,000 because the ending inventory in the previous period was
overstated by $7,000. The amounts reflected in the current end of the period balance
sheet are
Answer:
