The following is an excerpt from a telephone conversationbetween Ben Simpson, president of Main Street Co., and TamiLundgren, owner of Reliable Employment Co.:Ben: Tami, you're going to have to do a better job of finding me anew computer programmer. That last guy was great atprogramming, but he didn't have any common sense.Tami: What do you mean? The guy had a master's degree withstraight A's.Ben: Yes, well, last month he developed a new financialreporting system. He said we could do away with manuallypreparing an end-of-period spreadsheet and financialstatements. The computer would automatically generate ourfinancial statements with "a push of a button."Tami: So what's the big deal? Sounds to me like it would saveyou time and effort.Ben: Right! The balance sheet showed a minus for supplies!Tami: Minus supplies? How can that be?Ben: That's what I asked.Tami: So, what did he say?Ben: Well, after he checked the program, he said that it must beright. The minuses were greater than the pluses....Tami: Didn't he know that Supplies can't have a credit balance-it must have a debit balance?Ben: He asked me what a debit and credit were.Tami:I see your point.1. Comment on (a) the desirability of computerizing Main StreetCo.'s financial reporting system, (b) the elimination of the end-of-period spreadsheet in a computerized accounting system, and(c) the computer programmer's lack of accounting knowledge.2. Explain to the programmer why Supplies could not have acredit balance.

Financial statement A financial statement is the complete record of financial transactions that…

1. Comment on (a) the desirability of computerizing Main Street Co.'s financial reporting system, (b) the elimination of the end-of- period spreadsheet in a computerized accounting system, and (c) the computer programmer's lack of accounting knowledge. 2. Explain to the programmer why Supplies could not have a credit balance.

1. Comment on (a) the desirability of computerizing Main Street Co.'s financial reporting system, (b) the elimination of the end-of- period spreadsheet in a computerized accounting system, and (c) the computer programmer's lack of accounting knowledge. 2. Explain to the programmer why Supplies could not have a credit balance.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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