Fraud Case D worked as an accounting clerk with a gas distributor and his brother M lost his job at the machine plant. To help his brother in winter he made an entry to debit the parts inventory and credit M’s account, as he knew the manager or the owners’ son were incompetent and could not detect the extra entry made. D went on repeating the process until it was detected by an auditor. While firing D, the owner said had he approached him for M’ situation, he could have worked out something. To evolve: The methods to prevent this kind of employee fraud.

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Answer 1

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 8.1CTFC

1.

To determine

Fraud Case

D worked as an accounting clerk with a gas distributor and his brother M lost his job at the machine plant. To help his brother in winter he made an entry to debit the parts inventory and credit M’s account, as he knew the manager or the owners’ son were incompetent and could not detect the extra entry made. D went on repeating the process until it was detected by an auditor. While firing D, the owner said had he approached him for M’ situation, he could have worked out something.

To evolve: The methods to prevent this kind of employee fraud.

2.

To determine

To find out: The effect of the fraud by D on the balance sheet and the income statement.

3.

To determine

To ascertain: The extent of the discretion a business hasin regard to accommodating in hardship situation.

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Answer 2

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Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 8.1CTFC

1.

To determine

Fraud Case

D worked as an accounting clerk with a gas distributor and his brother M lost his job at the machine plant. To help his brother in winter he made an entry to debit the parts inventory and credit M’s account, as he knew the manager or the owners’ son were incompetent and could not detect the extra entry made. D went on repeating the process until it was detected by an auditor. While firing D, the owner said had he approached him for M’ situation, he could have worked out something.

To evolve: The methods to prevent this kind of employee fraud.

2.

To determine

To find out: The effect of the fraud by D on the balance sheet and the income statement.

3.

To determine

To ascertain: The extent of the discretion a business hasin regard to accommodating in hardship situation.

Expert Solution & Answer

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Answer 3

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 8.1CTFC

1.

To determine

Fraud Case

D worked as an accounting clerk with a gas distributor and his brother M lost his job at the machine plant. To help his brother in winter he made an entry to debit the parts inventory and credit M’s account, as he knew the manager or the owners’ son were incompetent and could not detect the extra entry made. D went on repeating the process until it was detected by an auditor. While firing D, the owner said had he approached him for M’ situation, he could have worked out something.

To evolve: The methods to prevent this kind of employee fraud.

2.

To determine

To find out: The effect of the fraud by D on the balance sheet and the income statement.

3.

To determine

To ascertain: The extent of the discretion a business hasin regard to accommodating in hardship situation.

Expert Solution & Answer

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Answer 4

Question

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

Chapter 8, Problem 8.1CTFC

1.

To determine

Fraud Case

D worked as an accounting clerk with a gas distributor and his brother M lost his job at the machine plant. To help his brother in winter he made an entry to debit the parts inventory and credit M’s account, as he knew the manager or the owners’ son were incompetent and could not detect the extra entry made. D went on repeating the process until it was detected by an auditor. While firing D, the owner said had he approached him for M’ situation, he could have worked out something.

To evolve: The methods to prevent this kind of employee fraud.

2.

To determine

To find out: The effect of the fraud by D on the balance sheet and the income statement.

3.

To determine

To ascertain: The extent of the discretion a business hasin regard to accommodating in hardship situation.

Expert Solution & Answer

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Answer 5

Chapter 8, Problem 8.1CTFC

1.

To determine

Fraud Case

D worked as an accounting clerk with a gas distributor and his brother M lost his job at the machine plant. To help his brother in winter he made an entry to debit the parts inventory and credit M’s account, as he knew the manager or the owners’ son were incompetent and could not detect the extra entry made. D went on repeating the process until it was detected by an auditor. While firing D, the owner said had he approached him for M’ situation, he could have worked out something.

To evolve: The methods to prevent this kind of employee fraud.

2.

To determine

To find out: The effect of the fraud by D on the balance sheet and the income statement.

3.

To determine

To ascertain: The extent of the discretion a business hasin regard to accommodating in hardship situation.

Answer 6

Chapter 8, Problem 8.1CTFC

1.

To determine

Fraud Case

D worked as an accounting clerk with a gas distributor and his brother M lost his job at the machine plant. To help his brother in winter he made an entry to debit the parts inventory and credit M’s account, as he knew the manager or the owners’ son were incompetent and could not detect the extra entry made. D went on repeating the process until it was detected by an auditor. While firing D, the owner said had he approached him for M’ situation, he could have worked out something.

To evolve: The methods to prevent this kind of employee fraud.

Answer 7

Chapter 8, Problem 8.1CTFC

1.

To determine

Fraud Case

D worked as an accounting clerk with a gas distributor and his brother M lost his job at the machine plant. To help his brother in winter he made an entry to debit the parts inventory and credit M’s account, as he knew the manager or the owners’ son were incompetent and could not detect the extra entry made. D went on repeating the process until it was detected by an auditor. While firing D, the owner said had he approached him for M’ situation, he could have worked out something.

To evolve: The methods to prevent this kind of employee fraud.

Answer 8

2.

To determine

To find out: The effect of the fraud by D on the balance sheet and the income statement.

Answer 9

2.

To determine

To find out: The effect of the fraud by D on the balance sheet and the income statement.

Answer 10

3.

To determine

To ascertain: The extent of the discretion a business hasin regard to accommodating in hardship situation.

Answer 11

3.

To determine

To ascertain: The extent of the discretion a business hasin regard to accommodating in hardship situation.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 8 - Prob. 1QC Ch. 8 - When recording credit card or debit card sales...Ch. 8 - Which of the following is a limitation of the...Ch. 8 - The entry to record a write-off of an...Ch. 8 - Brickman Corporation uses the allowance method to...Ch. 8 - Brickmans ending balance of Accounts Receivable is...Ch. 8 - At December 31 year-end, Crain Corporation has an...Ch. 8 - Using the data in the preceding question, what...Ch. 8 - At year-end, Schultz, Inc. has cash of 11,600,...Ch. 8 - Using the data in the preceding question, assume...

Solution Summary: The author explains how the business should have adopted the system of physical inventory taking periodically to find out the difference between the book balance and the physical of the parts inventory.

Concept explainers

To find out: The effect of the fraud by D on the balance sheet and the income statement.

To ascertain: The extent of the discretion a business hasin regard to accommodating in hardship situation.

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Chapter 8 Solutions