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AccountingAccounting (Text Only)26th Edition

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Chapter 4, Problem 4.2CP
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Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615

Solutions

Chapter
Section
Problem 1DQ
Problem 2DQ
Problem 3DQ
Problem 4DQ
Problem 5DQ
Problem 6DQ
Problem 7DQ
Problem 8DQ
Problem 9DQ
Problem 10DQ
Problem 4.1APE
Problem 4.1BPE
Problem 4.2APE
Problem 4.2BPE
Problem 4.3APE
Problem 4.3BPE
Problem 4.4APE
Problem 4.4BPE
Problem 4.5APE
Problem 4.5BPE
Problem 4.6APE
Problem 4.6BPE
Problem 4.1EX
Problem 4.2EX
Problem 4.3EX
Problem 4.4EX
Problem 4.5EX
Problem 4.6EX
Problem 4.7EX
Problem 4.8EX
Problem 4.9EX
Problem 4.10EX
Problem 4.11EX
Problem 4.12EX
Problem 4.13EX
Problem 4.14EX
Problem 4.15EX
Problem 4.16EX
Problem 4.17EX
Problem 4.18EX
Problem 4.19EX
Problem 4.20EX
Problem 4.21EX
Problem 4.22EX
Problem 4.23EX
Problem 4.24EX
Problem 4.25EX
Problem 4.26EX
Problem 4.27EX
Problem 4.28EX
Problem 4.1APR
Problem 4.2APR
Problem 4.3APR
Problem 4.4APR
Problem 4.5APR
Problem 4.1BPR
Problem 4.2BPR
Problem 4.3BPR
Problem 4.4BPR
Problem 4.5BPR
Problem 1COP
Problem 1CPP
Problem 4.1CP
Problem 4.2CP
Problem 4.3CP
BuyFindarrow_forward

Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem
86 views

Financial statements

The following is an excerpt from a telephone conversation between Ben Simpson, president of Main Street Co., and Tami Lundgren, owner of Reliable Employment Co.:

Ben: Tami, you're going to have to do a better job of finding me a new computer programmer. That last guy was great at programming, but he didn't have any common sense.

Tami: What do you mean? The guy had a master's degree with straight A's.

Ben: Yes, well, last month he developed a new financial reporting system. He said we could do away with manually preparing an end-of-period spreadsheet and financial statements. The computer would automatically generate our financial statements with “a push of a button.”

Tami: So what's the big deal? Sounds to me like it would save you time and effort.

Ben: Right! The balance sheet showed a minus for supplies!

Tami: Minus supplies? How can that be?

Ben: That's what I asked.

Tami: So, what did he say?

Ben: Well, after he checked the program, he said that it must be right. The minuses were greater than the pluses....

Tami: Didn't he know that Supplies can't have a credit balance—it must have a debit balance?

Ben: He asked me what a debit and credit were.

Tami: I see your point.

1.    Comment on (a) the desirability of computerizing Main Street Co.'s financial reporting system, (b) the elimination of the end-of-period spreadsheet in a computerized accounting system, and (c) the computer programmer's lack of accounting knowledge.

2.    Explain to the programmer why Supplies could not have a credit balance.

1.(a)

To determine

Financial statement

A financial statement is the complete record of financial transactions that take place in a company at a particular point of time. It provides important financial information like assets, liabilities, revenues and expenses of the company to its internal and external users. It helps them to know the exact financial position of the company. There are four basic financial statements; they are:

  • Balance Sheet
  • Income statement
  • Statement of owners’ equity
  • Statement of cash flows

Spreadsheet:

A spreadsheet is a worksheet. It is used while preparing a financial statement. It is a type of form having multiple columns and it is used in the adjustment process. The use of a worksheet is optional for any organization. A worksheet can neither be considered as a journal nor a part of the general ledger.

To Comment on: The desirability of computerizing Company MS’s financial reporting system.

Explanation

  • Computerizing the financial reporting system by Company MS is desirable as it decreases the costs of the com...

2.

To determine

To explain: To the programmer the reason behind the supplies could not have a credit balance.

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Ch-4 P-1DQCh-4 P-2DQCh-4 P-3DQCh-4 P-4DQCh-4 P-5DQCh-4 P-6DQCh-4 P-7DQCh-4 P-8DQCh-4 P-9DQCh-4 P-10DQ
Ch-4 P-4.1APECh-4 P-4.1BPECh-4 P-4.2APECh-4 P-4.2BPECh-4 P-4.3APECh-4 P-4.3BPECh-4 P-4.4APECh-4 P-4.4BPECh-4 P-4.5APECh-4 P-4.5BPECh-4 P-4.6APECh-4 P-4.6BPECh-4 P-4.1EXCh-4 P-4.2EXCh-4 P-4.3EXCh-4 P-4.4EXCh-4 P-4.5EXCh-4 P-4.6EXCh-4 P-4.7EXCh-4 P-4.8EXCh-4 P-4.9EXCh-4 P-4.10EXCh-4 P-4.11EXCh-4 P-4.12EXCh-4 P-4.13EXCh-4 P-4.14EXCh-4 P-4.15EXCh-4 P-4.16EXCh-4 P-4.17EXCh-4 P-4.18EXCh-4 P-4.19EXCh-4 P-4.20EXCh-4 P-4.21EXCh-4 P-4.22EXCh-4 P-4.23EXCh-4 P-4.24EXCh-4 P-4.25EXCh-4 P-4.26EXCh-4 P-4.27EXCh-4 P-4.28EXCh-4 P-4.1APRCh-4 P-4.2APRCh-4 P-4.3APRCh-4 P-4.4APRCh-4 P-4.5APRCh-4 P-4.1BPRCh-4 P-4.2BPRCh-4 P-4.3BPRCh-4 P-4.4BPRCh-4 P-4.5BPRCh-4 P-1COPCh-4 P-1CPPCh-4 P-4.1CPCh-4 P-4.2CPCh-4 P-4.3CP

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