Lance Berkman is the controller of Saturn, a dance club whose year-end is December 31. Berkman prepares checks for suppliers in December, makes the proper Journal entries, and posts them to the appropriate accounts in that month. However, he holds on to the checks and mails them to the suppliers in January. Requirements What financial ratio(s) is (are) most affected by the action to hold onto the checks until January? What is Berkman’s purpose in undertaking this activity?

Making a sale to customer who are already behind in making the payments on account is a threat. Rena is making a credit sale to Sara, a customer who is already six months behind in making payments on his account. What internal control procedure(s) would provide protection against these threats?

You are the staff accountant working at a local tutoring center.  The monthly financial statements (Income Statement, Statement of Retained Earnings, and Balance Sheet) were just finalized and released to the employees of the tutoring center.  You hear some of the other employees talking about the financial statements.  In most cases, the employees do not understand the purpose of the statements.  You have been asked by your supervisor to create a MEMO to be sent to the employees of the tutoring center that includes the following:   Explain how accounting became a “norm” (what made a system of accounting necessary) and reflect on why YOU think it is beneficial for society as a whole to have a standard method of accounting.

Assume you are a new hire in the accounting department of an organization. One of your responsibilities is the reconciliation of the operating account. After the end of the month you are given a copy of the bank statement and the cancelled checks, and are instructed to perform your reconciliation. You notice that there are some faint markings on a portion of the bank statement that could be alterations. What steps would you take in performing the reconciliation?

immy Pace has recently been hired as the manager of Jittery Jon’s Coffee Shop. Jittery Jon’s Coffee Shop is a national chain of franchised coffee shops. During his first month as store manager, Jimmy encountered the following internal control situations:a.Jittery Jon’s Coffee Shop has one cash register. Prior to Jimmy’s joining the coffee shop, each employee working on a shift would take a customer order, accept payment, and then prepare the order. Jimmy made one employee on each shift responsible for taking orders and accepting the customer’s payment. Other employees prepare the orders.b.Because only one employee uses the cash register, that employee is responsible for counting the cash at the end of the shift and verifying that the cash in the drawer matches the amount of cash sales recorded by the cash register. Jimmy expects each cashier to balance the drawer to the penny every time—no exceptions.c.Jimmy caught an employee putting a case of 1,000 single-serving tea bags in her car.…

Let's suppose you are an accounts payable clerk for a small home‐improvements contractor. This morning one of the site supervisors submitted an invoice requesting immediate payment to a new vendor for items he claims were delivered directly to a work site. The supervisor attached a note to the invoice asking that the check be returned to him upon issuance so that he could personally deliver it to the vendor. This would ensure the timeliness of future deliveries. He claims that unless the payment is made immediately, there will be delivery delays on items needed to complete this job, as well as delays on items for another contract in progress. Although you are suspicious of this unusual request, you are tempted to accommodate it. You know that timely completion and collection on these contracts is critical to the company's production scheduling and cash management. Moreover, the company president is on vacation and therefore not available to grant special authorization for this payment.…

Please read the following and identify any internal control principles that may be violated in the Jane Hardware store.(identify what could go wrong and what controls Jane Hardware should put in place to prevent it) Jerry Finch has worked for Jane Hardware for many years, Jerry has been a model employee.  He has not taken a vacation in over three years, always stating that work was too important.  One of Jerry's primary jobs at the store is to open mail and list the checks received.  He also collects cash from customers at the store's outdoor nursery area.  There are times that things are so hectic that Jerry does not bother to use the register, simply making change from cash he carries with him.  When things slow down at the store Jerry often offers to help Cindy(the Accounting Clerk) post payments to the customer's accounts receivable ledger.  Cindy is  always happy to receive help since she is also quite busy and because Jerry is such a careful worker.

Mike and his supervisor Claire are having a conversation one morning about one of their current audit clients internal controls over the payroll. Mike mentions to Claire that he has considered conducting a walkthrough of the client's payroll system but isn't exactly sure what documentation he might collect to support his walk through. Which of the following represent appropriate recommendations by Claire with respect to documentation Mike could collect? Select all that apply: 1. Mike should consider collecting source documents to support payroll transactions such as bills of lading 2. Mike should consider selecting and reviewing a sample of employee time cards for hourly employees, to verify hours worked 3. Mike could think about selecting a sample of payroll authorizations to ensure only authorized new employees are added to the payroll 4. Mike could examine payroll tax retums for the client, to ensure that employees are currently remitting federal, state, and local taxes to the…