What Would You Do?
A new bookkeeper can’t find the errors that are causing the company’s month-end
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Chapter 2 Solutions
College Accounting (Book Only): A Career Approach
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Fundamentals Of Financial Accounting
Fundamentals Of Cost Accounting (6th Edition)
FINANCIAL ACCT.FUND.(LOOSELEAF)
Financial Accounting (12th Edition) (What's New in Accounting)
Fundamentals of Cost Accounting
Financial Accounting (11th Edition)
- Cyber Systems’ management has been actively pursuing clients who fail to pay invoices when they fall due. Based on the experience of Cyber Systems in the 2021 financial year which ends on June 30, the longer an account receivable is outstanding, the more likely the client never pays the amount due. The longer the account is due, the more likely the client closes their travel agency and can never pay amounts due to Cyber Systems. Answer the following: (a) Identify the method and approach that is appropriate to account for bad debts in this case. (b) With reference to three relevant accounting principles, assumptions and/or qualitative characteristics, justify why the method and approach you have identified in part (a) is appropriate. Clearly label each part of your answer related to parts a and b above. In particular for part b, structure your answer as follows for each of the three relevant accounting principles, assumptions and/or qualitative characteristics:Identify accounting…arrow_forward1.Is it fair for creditors to continue reporting late payments after the payments have been made? What do you think about experts’ suggestion that people with credit blemishes write a sincere “goodwill” letter to creditors asking for compassion and requesting that the records of their late payments be erased? 2. Is it true that the “squeaky wheel gets the most grease,” meaning that the customer complaining the loudest and most aggressively will get noticed and receive the greatest concessions?arrow_forwardThe owner of a local business complains that the adjustments process consumes a lot of time and delays reportingmonth-end financial results. How would you convince herof the importance of this process?arrow_forward
- Your client is preparing financial statements to show the bank. You know that he has incurred a refrigeration repair expense during the month, but you see no such expense on the books. When you question the client, he tells you that he has not yet paid the 1,255 bill. Your client is on the accrual basis of accounting. He does not want the refrigeration repair expense on the books as of the end of the month because he wants his profits to look good for the bank. Is your client behaving ethically by suggesting that the refrigeration repair expense not be booked until the 1,255 is paid? Are you behaving ethically if you agree to the clients request? What principle is involved here?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_forwardA customer has filed a suit against a trader who has supplied poor quality goods to him. It is known that the court judgment will be in favour of the customer and the trader will be required to pay the damages. However, the amount of legal damages is not known with certainity. The accounting year has already been ended and the books are now finalised to ascertain true profit or loss. The accountant of the trader has advised him not to consider the expected loss on account of payment of legal damages because the amount is not certain and the final judgment of the court is not yet out. Do you think the accountant is right in his approach.arrow_forward
- the 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_forwardKingston Marina noticed an error in their financial statements after the financial statements had been submitted to their bank. The company is applying for a new loan to install a new wharf. The controller of Kingston should do nothing or resign. Ⓒ inform Kingston's management and inform the bank and provide corrected financial statements. O inform Kingston's management and assume that they will tell the bank. O wait until the bank has approved the loan to notify them of the mistake.arrow_forwardHere is a scenario where you would have to deal with a customer who is being rude and abusive. You work for as a customer service representative at a call center for a company that makes exercise equipment. A customer calls in complaining that her treadmill motor is smoking. She has called in previously and was informed that her warranty has been voided because she did not follow the maintenance instructions in the handbook for her machine. She is upset because no one ever told her about maintenance when she bought the machine. She starts calling you a crook for robbing her, and continues to call you names (including some we can’t print). Explore what steps you would take in this situation to remain calm and relaxed. How would you go about de-escalating the situation? How do you avoid correcting the customer and putting her on the defensive? If it became absolutely necessary, how would you phrase a warning to refrain from personal attacks?arrow_forward
- Your supervisor tells you to change the aging category of a large account from account receivables from over 120 days to current status and prepare a new invoice to the customer with the revised date that agrees with this new category. this will change the required allowance of uncollectible accounts from $180,000 to $135,000. what is the ethical dilemma the assistant controller faces?what are the ethical considerations? consider the options and responsibilities as the assistant controllerarrow_forwardWhat is NOT an example of rationalization as one of the three elements causing a person to commit fraud? CA The company will never miss it CB. Employer pressure to report fictitious accounting results c. This replaces my bonus that was suspended this year CD. I will repay the "loan" before anyone misses itarrow_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. What are the potential consequences if you do comply with your supervisors instructions?Who will be negatively impacted?arrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage LearningIndividual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT