1) Using the information given below for a company that uses a perpetual inventory
system, calculate the ending inventory using weighted average.
2)
For each of the independent cases below, identify the principle of internal control that is
violated, and recommend what should be done to remedy the violation.
1> In order to save money, Regal Company has decided to drop its property insurance
on assets; and stop bonding the cashiers who handle about $10,000 in cash each day.
2> Halton Company records each sale on a preprinted invoice. Since sometimes
invoices are damaged in the process of being prepared, the invoices are not
prenumbered, but the sales clerk writes the next number onto each invoice.
3> Marion Company is a very small business. Bob Lepley, one of the two office clerks,
opens the mail each day and removes the cash receipts that come in the mail. Bob then
records the receipts in the cash records and the customer’s account and deposits the cash
in the bank.
4> Gerald McNichols, the owner of McNichols Company prides himself on hiring only
the most competent employees. McNichols believes that since these employees are
highly competent and to show that he trusts them completely, he feels there is no need
for anyone to check up on the employees’ performance.
5> Service Products is a small business with only 3 accounting employees. Each
employee is well-trained and so can perform any of the accounting tasks, including
handling cash receipts and cash disbursements, and preparing the bank reconciliation.
3) Regardless of what inventory method or system is used, cost of goods available for
sale must be allocated between ___________________ and __________________.
4) What is a short-term note payable? Explain the accounting issues related to notes
payable.
5) Relevant costs are also known as __________________.
6) A disadvantage of a sole proprietorship is the fact that the owner has
__________________.
7)
Describe at least five benefits of budgeting.
8) The Ticky Company manufactures tacks. Costs for September were direct labor,
$84,000; indirect labor, $36,700; direct materials, $55,900; factory maintenance,
$4,800; factory utilities, $3,200; and insurance on plant and equipment, $700. What is
Ticky Company’s factory overhead for September?
9) What are the steps that must be completed before an invoice approval is complete
and a voucher prepared?