The following is an excerpt from a telephone conversation between Pedro Mendoza, president of Goliath Supplies Co., and Natalie Weich, owner of Flint Employment Co.: Pedro: Natalie, 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. Natalie: What do you mean? The guy had a master’s degree with straight A’s. Pedro: Yes, well, last month he developed a new financial reporting system. He said we could do away with manually preparing financial statements. The computer would automatically generate our financial statements with “a push of a button.” Natalie: So what’s the big deal? Sounds to me like it would save you time and effort. Pedro: Right! The balance sheet showed a minus for supplies! Natalie: Minus supplies? How can that be? Pedro: That’s what I asked. Natalie: So, what did he say? Pedro: Well, after he checked the program, he said that it must be right. The minuses were greater than the pluses... Natalie: Didn’t he know that supplies can’t have a credit balance—it must have a debit balance? Pedro: He asked me what a debit and credit were. Natalie: I see your point. 1. Comment on (a) the desirability of computerizing Goliath Supplies Co.’s financial reporting system and (b) the computer programmer’s lack of accounting knowledge. 2. Explain to the programmer why supplies could not have a credit balance.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

The following is an excerpt from a telephone conversation between Pedro Mendoza, president of Goliath Supplies Co., and Natalie Weich, owner of Flint Employment Co.: Pedro: Natalie, 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. Natalie: What do you mean? The guy had a master’s degree with straight A’s. Pedro: Yes, well, last month he developed a new financial reporting system. He said we could do away with manually preparing financial statements. The computer would automatically generate our financial statements with “a push of a button.” Natalie: So what’s the big deal? Sounds to me like it would save you time and effort. Pedro: Right! The balance sheet showed a minus for supplies! Natalie: Minus supplies? How can that be? Pedro: That’s what I asked. Natalie: So, what did he say? Pedro: Well, after he checked the program, he said that it must be right. The minuses were greater than the pluses... Natalie: Didn’t he know that supplies can’t have a credit balance—it must have a debit balance? Pedro: He asked me what a debit and credit were. Natalie: I see your point.

1. Comment on (a) the desirability of computerizing Goliath Supplies Co.’s financial reporting system and (b) the computer programmer’s lack of accounting knowledge.

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

 

Expert Solution
steps

Step by step

Solved in 2 steps with 3 images

Blurred answer
Knowledge Booster
System development life cycle (SDLC)
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education