FINANCIAL ACCOUNTING:TOOLS FOR BUSINESS
19th Edition
ISBN: 9781119493624
Author: Kimmel
Publisher: WILEY
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Toshib is struggling to understand the impact of certain business transactions on the financial statements. She has very little accounting knowledge and feels intimidated by all the accounting jargon thrown around by her accountant friends. One day around a braai she raised her frustrations and gave a list of transactions of which she doesn’t understand the impact on the financial statements. As she is a good friend of yours, you willingly offer your help and asked her to put her concerns in writing. The next morning a thank you note was delivered to your office with the following list of transactions she required clarity on:
1. On 1 July 20x9 I started the business by opening a bank account with R150 000 and transferred office furniture which I had from a previous venture with a second-hand value of R35 000.
2. During the first month the following transactions occurred:
2.1 Opened an account with Magna Suppliers and bought R200 000 merchandise.
2.2 Bought a delivery vehicle from Max…
An 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?
8) Maya owns a bakery. She has already gathered and examined the checks, credit card
receipts, sales slips, and other related evidence concerning specific transactions. She has
also recorded each financial transaction in a journal and transferred that information into
a ledger. What must Maya do before preparing the financial statements?
A) She must check her journal for mistakes.
B) She must recheck all her source documents.
C) She must prepare a trial balance.
D) She must throw away her ledger and start over.
E) She must attest that she used generally accepted accounting principles.
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- The following is an excerpt from a conversation between two employees of WXT Technologies, Nolan Sears and Stacy Mays. Nolan is the accounts payable clerk, and Stacy is the cashier. Nolan: Stacy, could I get your opinion on something? Stacy: Sure, Nolan. Nolan: Do you know Rita, the fixed assets clerk? Stacy: I know who she is, but I don't know her real well. Why? Nolan: Well, I was talking to her at lunch last Monday about how she liked her job. You know, the usual; and she mentioned something about having to keep two sets of books—one for taxes and one for the financial statements. That can't be good accounting, can it? What do you think? Stacy: Two sets of books? It doesn't sound right. Nolan: It doesn't seem right to me either. I was always taught that you had to use generally accepted accounting principles. How can there be two sets of books? What can be the difference between the two? How would you respond to Nolan and Stacy if you were Rita?arrow_forwardThe bookkeeper entered an adjusting entry as DR. Depreciation Expense and CR. Cash. Further investigation indicated that the bookkeeper and the cashier colluded to withdraw $10,000 (the amount of Depreciation Expense) from the company's bank account and forged necessary documents to perpetuate this crime. At the time when this was discovered, the bookkeeper and the cashier already absconded. As the accounting software consultant, what can you recommend to avoid this event from happening again? Group of answer choices Establish pairings of account titles of certain transactions, and unsual pairings of account titles can be labeled as adjusting entries The General Manager should always monitor the entries made by the bookkeeper All of the above None of the abovearrow_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_forward
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