FINANCIAL & MANAGERIAL ACCOUNTING
9th Edition
ISBN: 9781266640667
Author: Wild
Publisher: MCG
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Chapter 6, Problem 2BTN
To determine
Introduction: A memorandum is a written communication that is typically used in a professional situation. These communications, which are sometimes abbreviated "memos," are frequently brief and are designed to be quickly and effectively understood.
To prepare: The memorandum form.
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Which of the following are examples of preventive controls? Select all that apply.
O account coding on purchase orders is checked by the computer using a table of valid
account numbers
computerized accounting system will not allow a sale to be processed if a customer has
exceeded its credit limit
O quarterly review of credit balances in accounts receivable for reasonableness
O sales manager reviews daily shipments, total sales, and sales per unit shipped
O sales invoices are priced automatically using a master pricing file
1.Which of the following statements are true?a. Recording purchase transactions in a general journal is considered efficient.b. Most businesses will carefully enter all purchase orders using the purchase orderjournal.c. A purchase requisition follows a purchase order.d. It is important for a company to verify all numbers on a supplier’s invoicee. In general, cash discounts are so minor they can be ignored.
From the following, prepare a Schedule of Accounts Payable for Digital Co. for September 30, 2022.
Account payable 210 Credit 100 9/5 GJ4 200 9/7 GJ5 300 9/15 GJ6 800 9/18 GJ6
L VON CO. CREDIT 100 9/5 GJ4
XON CO. CREDIT 300 9/15 GJ6
J. BEE CO. CREDIT 800 9/18 GJ6
ZERO CO. CREDIT 200 9/7 GJ5
In a system like QuickBooks Online, when should you create an invoice?
a. When a customer purchases goods or services and pays you in cash at the time of the sale
b. When a customer purchases goods or services but does not pay you at the time of the sale
c. When a customer purchases goods or services and pays you by check or credit card at the time of the sale
d. When a customer purchases goods or services, but you don't want to record the sale as final
Chapter 6 Solutions
FINANCIAL & MANAGERIAL ACCOUNTING
Ch. 6 - Prob. 1QSCh. 6 - Prob. 2QSCh. 6 - Prob. 3QSCh. 6 - Prob. 4QSCh. 6 - Prob. 5QSCh. 6 - Prob. 6QSCh. 6 - Prob. 7QSCh. 6 - Prob. 8QSCh. 6 - Prob. 9QSCh. 6 - Prob. 10QS
Ch. 6 - Prob. 11QSCh. 6 - Prob. 12QSCh. 6 - Prob. 13QSCh. 6 - Prob. 14QSCh. 6 - Prob. 15QSCh. 6 - Prob. 16QSCh. 6 - Prob. 1ECh. 6 - Prob. 2ECh. 6 - Prob. 3ECh. 6 - Prob. 4ECh. 6 - Prob. 5ECh. 6 - Prob. 6ECh. 6 - Prob. 7ECh. 6 - Prob. 8ECh. 6 - Prob. 9ECh. 6 - Prob. 10ECh. 6 - Prob. 11ECh. 6 - Prob. 12ECh. 6 - Prob. 13ECh. 6 - Prob. 14ECh. 6 - Prob. 15ECh. 6 - Prob. 16ECh. 6 - Prob. 17ECh. 6 - Prob. 1PSACh. 6 - Prob. 2PSACh. 6 - Prob. 3PSACh. 6 - Prob. 4PSACh. 6 - Prob. 5PSACh. 6 - Prob. 1PSBCh. 6 - Prob. 2PSBCh. 6 - Prob. 3PSBCh. 6 - Prob. 4PSBCh. 6 - Prob. 5PSBCh. 6 - Prob. 6SPCh. 6 - Prob. 1GLPCh. 6 - Prob. 1.1AACh. 6 - Prob. 1.2AACh. 6 - Prob. 1.3AACh. 6 - Prob. 1.4AACh. 6 - Prob. 1.5AACh. 6 - Prob. 2.1AACh. 6 - Prob. 2.2AACh. 6 - Prob. 3.1AACh. 6 - Prob. 3.2AACh. 6 - Prob. 3.3AACh. 6 - Prob. 3.4AACh. 6 - Prob. 1DQCh. 6 - Prob. 2DQCh. 6 - Prob. 3DQCh. 6 - Prob. 4DQCh. 6 - Prob. 5DQCh. 6 - Prob. 6DQCh. 6 - Prob. 7DQCh. 6 - Prob. 8DQCh. 6 - Prob. 9DQCh. 6 - Prob. 10DQCh. 6 - Prob. 11DQCh. 6 - Prob. 12DQCh. 6 - Prob. 13DQCh. 6 - Prob. 14DQCh. 6 - Harriet Knox, Ralph Patton, and Marcia Diamond...Ch. 6 - Prob. 2BTNCh. 6 - Prob. 3BTNCh. 6 - Prob. 4BTN
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- A company is trying to set up proper internal controls for their accounts payable/inventory purchasing system. Currently the purchase order is generated by the same person who receives the inventory. Together the purchase order and the receiving ticket are sent to accounts payable for payment. What changes would you make to improve the internal control structure? Group of answer choices 1.The person in accounts payable should generate the purchase order. 2.The person in accounts payable should generate the receiving ticket once the invoice from the supplier is received. 3.No changes would be made since the person paying the bills is different from the person ordering the inventory. 4.The responsibilities of generating the purchase order and receiving the inventory should be separated among two different people.arrow_forwardWhich common workflow error can cause duplicate expenses in QuickBooks Online? -Create a purchase order to record vendor expense and copy to bill to pay vendor later for the same expense -Create a bill to record a vendor expense, and use Pay Bills to pay the vendor for the same expense -Create a bill to record a vendor expense, and create a check to the vendor for the same expense -Create a bank rule to automatically categorize a common vendor expensearrow_forwardThe sales department receives the unstandardised sales order since customer orders are mailed, e-mailed or faxed to the sales department. The sales clerk first converts the unstandardised sales order into the standardised sales order. For this purpose, the sales representative requests the missing information, if any. When the order is received, the sales clerk checks the customer’s creditworthiness of the customer from his computer terminal. Three years ago, the sales clerk requested the accounting department to provide him with a list of customers whose account receivables are written off. The sales clerk is still using this information to check the creditworthiness of the customers. The sales clerk is using the same procedure to check the creditworthiness of the new customers.The customer’s order is rejected if the customer’s credit is not verified. The sales order processing is started after the credit verification. In particular, the sales clerk records the approved standardised…arrow_forward
- The sales department receives the unstandardised sales order since customer orders are mailed, e-mailed or faxed to the sales department. The sales clerk first converts the unstandardised sales order into the standardised sales order. For this purpose, the sales representative requests the missing information, if any. When the order is received, the sales clerk checks the customer’s creditworthiness of the customer from his computer terminal. Three years ago, the sales clerk requested the accounting department to provide him with a list of customers whose account receivables are written off. The sales clerk is still using this information to check the creditworthiness of the customers. The sales clerk is using the same procedure to check the creditworthiness of the new customers.The customer’s order is rejected if the customer’s credit is not verified. The sales order processing is started after the credit verification. In particular, the sales clerk records the approved standardised…arrow_forwardDiscuss the trade-off in choosing to update the customer credit, should the sales clerk ever be authorized to override the decision? If so when?arrow_forwardthe accounts payable (A/P) clerk asked you to open an account named New Expenses. You know that an account name should be specific and well defined, and you're afraid the A/P clerk might charge some expenses to the account that are inappropriate. Why do you think the A/P clerk needs the New Expenses account? Who needs to know this information and what action should you consider?arrow_forward
- 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?arrow_forwardProvide an appropriate response based on the following scenarios. Assume that the accounting clerk posts a customer’s payment for the wrong amount, giving the customer credit for less than he or she actually paid. How will this error be detected? How might this error have been prevented? Assume that the employee who opens the mail steals a customer payment. How will this theft be detected? How might this theft have been prevented?arrow_forwardWhen the store manager receives a requisition note, he issues three copies of purchase order. Two copies of these orders are sent to the vendor and one copy remains in the stores file. When the goods are received, the store manager matches the purchase order with the invoice and forwards them to accounts payable department for payment of dues. Which of the following statement best describes the internal control over the purchasing process? Inadequate control over accounts payable. Inadequate segregation of duties. Inadequate segregation of duties. Adequate internal control exists.arrow_forward
- CASE SUMMARY: Retailers commonly track customer's shopping patterns and target them with special offers. For example, PTS an Extra care card that, when swiped at checkout applies discounts to purchases and provides rebates called Extra Bucks to be used as cash on future purchases. Behind the scenes, PTS has gathers data on customer’s purchases and using aggregated data to target individuals with special offers. Customers who have not recently shopped may receive a discount in the mail or an online offer to incentive them to return. Questions Identify the existing ethical dilemma for companies collecting data including personally identifying data on their customers. What is your personal recommendation on what actions companies should take with regard to data collection activities?arrow_forwardA company is trying to set up proper internal controls for their accounts payable/inventory purchasing system. Currently the purchase order is generated by the same person who receives the inventory. Together the purchase order and the receiving ticket are sent to accounts payable for payment. What changes would you make to improve the internal control structure? A. No changes would be made since the person paying the bills is different from the person ordering the inventory. B. The person in accounts payable should generate the purchase order. C. The person in accounts payable should generate the receiving ticket once the invoice from the supplier is received. D. The responsibilities of generating the purchase order and receiving the inventory should be separated among two different people.arrow_forwardDescribe the who, what, where, and how of the following scenario: A customer gives his purchase to a sales clerk, who enters the sale in a cash register and puts the money in the register drawer. At the end of the day, the sales clerk gives the cash and the register tape to the cashier.arrow_forward
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