ACC 202 Principles of Accounting 2 Ball State University
ACC 202 Principles of Accounting 2 Ball State University
15th Edition
ISBN: 9781308193977
Author: Noreen, Brewer Garrison
Publisher: MCG/CREATE
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Chapter AB, Problem 8C
To determine

Relative profitability: Relative profitability of a business and its products/services is a measure of analysing its profits and earnings as compared to the expenses it is incurring.

The relative profitability for Vectra Corporation to be measured assuming the following −

  • The way the sales persons are compensated will not be changed.
  • The only data available are the selling price, sales commission, cost of sales, operating expenses and the profit margin for each product.

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Internal controls are the rules and procedures that a company develops and implements. These controls help to maintain the accountability and integrity of the accounting information as well as help to prevent fraud. There are many objectives of a well-designed internal control structure in an organization. These include having a controlled environment, assessing risks, and monitoring. An example of a control that I personally use would be in our register system. Every night, the evening cook/helper counts down the cash register drawer and lets me know how much cash was in the drawer over the amount that we leave in it every night of $125. The next morning, I compare the information from the cash register balance sheet to the computer system to ensure all numbers match up. These numbers are then recorded daily into a monthly spreadsheet that we ensure balances at the end of the month. Respond to ally's post
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