Pkg Acc Infor Systems MS VISIO CD
10th Edition
ISBN: 9781133935940
Author: Ulric J. Gelinas
Publisher: CENGAGE L
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Chapter 16, Problem 3DQ
Summary Introduction
To explain: The problems faced by an organization during interim closings and the solutions to those problems.
Introduction:
General ledger/business reporting process (GL/BR):
General ledger can be defined as the central data repository needed to develop the business reports. The business reports and other forms of information generation are all derived from the general ledger data repository. The GL/BR process is considered as a central activity of the
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What would be the result if a company inadvertently neglected to close out one of its expense accounts at year-end during the closing process?
On January 20, 2019, Tamira Nelson, the accountant for Picton Enterprises, is feeling pressure to complete the annual financial statements. The company president has said he needs up-to-date financial statements to share with the bank on January 21 at a dinner meeting that has been called to discuss Picton’s obtaining loan financing for a special building project. Tamira knows that she will not be able to gather all the needed information in the next 24 hours to prepare the entire set of adjusting entries. Those entries must be posted before the financial statements accurately portray the company’s performance and financial position for the fiscal period ended December 31, 2018. Tamira ultimately decides to estimate several expense accruals at the last minute. When deciding on estimates for the expenses, she uses low estimates because she does not want to make the financial statements look worse than they are. Tamira finishes the financial statements before the deadline and gives them…
Which of the following is least likely to be a procedure included in an accountant’s review of interim financial information of a public entity?
a.Compare disaggregated revenue data by month to that of the previous interim period.
b.Read available minutes of meetings of stockholders.
c.Inquire of management concerning significant journal entries and other adjustments.
d.Observe counting of physical inventory.
Chapter 16 Solutions
Pkg Acc Infor Systems MS VISIO CD
Ch. 16 - Prob. 1RQCh. 16 - Prob. 2RQCh. 16 - Prob. 3RQCh. 16 - What, in your own words, are a performance report...Ch. 16 - Prob. 5RQCh. 16 - Prob. 6RQCh. 16 - What limitations are faced by contemporary...Ch. 16 - Prob. 8RQCh. 16 - Prob. 9RQCh. 16 - Prob. 10RQ
Ch. 16 - Prob. 11RQCh. 16 - Prob. 12RQCh. 16 - Prob. 1DQCh. 16 - Prob. 2DQCh. 16 - Prob. 3DQCh. 16 - Prob. 4DQCh. 16 - Prob. 5DQCh. 16 - Prob. 6DQCh. 16 - Prob. 7DQCh. 16 - Prob. 8DQCh. 16 - Prob. 9DQCh. 16 - Prob. 1SPCh. 16 - Prob. 2SPCh. 16 - Prob. 1PCh. 16 - Prob. 4PCh. 16 - Prob. 5PCh. 16 - Prob. 9PCh. 16 - Prob. 11P
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- Assume you are employed as the chief financial officer of a corporation and are responsible for preparation of the financial statements, including the adjusting process and preparation of the adjusted trial balance. The company is facing a slow year, and after your adjusting entries, the financial statements are accurately reflecting that fact. However, as you are discussing the matter with your boss, the chief executive officer (CEO), he suggests that you have the power to make further adjustments to the statements, and that you should use that power to adjust the profits and equity into a stronger position, so that investor confidence in the companys prospects will be restored. Write a short memo to the CEO, stating your intentions about what you can and/or will do to make the financial statements more appealing. Be specific about any planned adjustments that could be made, assuming that normal period-end adjustments have already been reflected accurately in the financial statements that you prepared.arrow_forwardAssume you are a newly-hired accountant for a local manufacturing firm. You have enjoyed working for the company and are looking forward to your first experience participating in the preparation of the companys financial statements for the year-ending December 31, the end of the companys fiscal year. As you are preparing your assigned journal entries, your supervisor approaches you and asks to speak with you. Your supervisor is concerned because, based on her preliminary estimates, the company will fall just shy of its financial targets for the year. If the estimates are true, this means that all 176 employees of the company will not receive year-end bonuses, which represent a significant portion of their pay. One of the entries that you will prepare involves the upcoming bond interest payment that will be paid on January 15 of the next year. Your supervisor has calculated that, if the journal entry is dated on January 1 of the following year rather than on December 31 of the current year, the company will likely meet its financial goals thereby allowing all employees to receive year-end bonuses. Your supervisor asks you if you will consider dating the journal entry on January 1 instead of December 31 of the current year. Assess the implications of the various stake holders and explain what your answer will be.arrow_forwardAll accounts in the general ledger are closed at a company's fiscal year end in order to facilitate preparation of the financial statements and to ready the accounts for the activities of the next year.arrow_forward
- Explain how interim financial statements areprepared in a business that closes its accountsonly at year-end.arrow_forwardOnce closing entries have been entered in the general journal and posted to the ledger, what is the effect on the owner’s capital (or retained earnings) account? Explain the purpose of a post-closing trial balance in your own words and answer this question: Is the post-closing trial balance mandatory as a step in the accounting cycle? Reflect on this question: Assuming a company’s first year-end, would financial statements be affected if the closing process were not completed? Explain.arrow_forwardAssume you are a newly hired accountant for a local manufacturing firm. You have enjoyed working for the company and are looking forward to your first experience participating in the preparation of the company’s financial statements for the year-ending December 31, the end of the company’s fiscal year. As you are preparing your assigned journal entries, your supervisor approaches you and asks to speak with you. Your supervisor is concerned because, based on her preliminary estimates, the company will fall just shy of its financial targets for the year. If the estimates are true, this means that all 176 employees of the company will not receive year-end bonuses, which represent a significant portion of their pay. One of the entries that you will prepare involves the upcoming bond interest payment that will be paid on January 15 of the next year. Your supervisor has calculated that, if the journal entry is dated on January 1 of the following year rather than on December 31 of the current…arrow_forward
- At year-end, the president instructs you, the financial officer, not to record accrued expenses until next year because they will not be paid until then. The president also directs you to record in current-year sales a recent purchase order from a customer that requires merchandise to be delivered two weeks after the year-end. Your company would report a net income instead of a net loss if you follow these instructions. What do you do?arrow_forwardFor each of the following situations, identify whether a change in accounting estimate, change in accounting policy, or an accounting error has occurred. Also indicate whether the change or correction should be made prospectively or retrospectively. The accounting clerk did not record a shipment of product on the last day of the previous fiscal year, because the customer had not yet paid for the product. The shipment was made FOB shipping point. In the past, Uni-Focus Company used the cash basis of accounting. This year, the Company is changing to the accrual basis of accounting. Tri-Facet Ltd follows ASPE. Management of Tri-Facet decided to switch from using the taxes payable method to using the future income tax method.arrow_forwardJournalizing and posting closing entries is a required step in the accounting cycle. Discuss why it is necessary to close the books at the end of an accounting period. If closing entries were not made, how would the preparation of financial statements be affected?arrow_forward
- A new client, the Wolf Company, asks your advice concerning the point in time that the company should recognize revenue from the rental of its office buildings under generally accepted accounting principles. Renters usually pay rent on a quarterly basis at the beginning of the quarter. The owners contend that the critical event that motivates revenue recognition should be the date the cash is received from renters. After all, the money is in hand and is very seldom returned.Required:Do you agree or disagree with the position of the owners of Wolf Company? State whether you agree or disagree, and support your answer by relating it to accrual accounting under GAAP.arrow_forwardexplain what accounting principles or concepts would be violated if the accounts were not closed at the end of one accounting period when this had been done in previous years.arrow_forwardThe current pay period ends on Friday, January 2, yet the company’s fiscal year-end is onWednesday, December 31. If the company does not make the proper adjusting entry toaccrue payroll expenses at year-end, what would be the impact?a. Assets will be understated.b. Operating income will be overstated.c. Stockholders’ equity will be understated.d. Liabilities will be overstated.arrow_forward
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