...1 historical cost accounting (hca) is the situation in which accountants record revenue, expenditure and asset acquisition and disposal at historical cost: that is, the actual amounts of money, or money's worth, received or paid to complete the transaction. 2 nature of historical cost accounting this is one of those idiosyncratic headings that teachers dream up (me too, probably!) that meant nothing to me without further explanation 3 the big advantage of hca is that it leads to absolute certainty and it fits in perfectly with the cash flow statement. Hca tells us exactly what has been paid and what has been received and therefore there is no doubt about balance sheet amounts. The alternatives, where accountants attempt to take inflation into account, can lead to many problems. There have been several forms of current cost accounting, purchasing power accounting and so on since the mid 1970s that have been proposed as alternatives to hca. The reason the alternatives have not survived, and IAS 15 on inflation accounting is about to be replaced, if it hasn't been already, is that no one can agree on the best way to represent accounting values. Hca provides definite values, other methods don't! 4 the disadvantages of hca include the fact that hca values can relate to transactions that could be a year old, 10 years old and as much as 100 years old. It's true that some businesses have old equipment and old stocks (inventories) that are still working well but that were bought a...
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.... Vulnerability by definition it is a weakness or flaw found in software and operating systems that threats try to exploit. In this modern world no program or operating system is built perfectly secure unless the computer is completely disconnected from the Internet or unplugged from any connection. Vulnerabilities exist because computers multitask and communicate in so many ways. These forms of communication and multitasking open channels not just for legitimate applications, but also for malicious ones. I believe B2C are more vulnerable than B2B. B2B websites communicate in a Virtual Private network between the 2 businesses; therefore it limits the vulnerability of the website. There are few areas where B2B have better assurance when it comes to vulnerability and they have proper remedy in place below is just a few examples Area of vulnerability Threats Remedy or assurance Security Malicious programs (viruses) Unauthorized access Denial of service attack Proper password generation Patches , firewall, antivirus Encryption Financial Settlement /payment Safe , private and trustworthy Diversion of funds Unauthorized usage of funds Non-repudiation of funds Secure socket layers Macro payment Micro payment (e-wallets)s Transaction Integrity Alteration of documents Deletion of documents Duplication of documents Diversion of documents Electronic sender –receipt encryption It’s very hard for consumers to...
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...Departments In A Bank As soon as it becomes necessary, on account of volume of business, to divide the work in a bank into divisions, each employing a group of clerks, such division is organized into a department having a department head who is usually a teller, a head bookkeeper, or perhaps a junior officer. In the very large banks the executive staff is itself organized into groups, and there may be a vice - president and one or two assistant cashiers in charge of each important department. The work of a department in a large bank is nothing more nor less than the work of a single man in a small bank, apportioned among several men. For example, the receiving teller in a five-man bank will take the deposit, count the cash, examine the checks, assort them as to place payable, enter them upon the proper records and make a settlement or proof at the end of the day. In a large bank each of these operations is performed by a different man or group of clerks under the direction of the receiving teller, who is head of the department. It may be that he himself will do very little if any of the detail work. He becomes the manager. Frequently we find a department within a department, as for example, the money department within the paying teller's department. The ordinary departments, classified as to group, may be described as follows: Paying Teller's Department (Teller): Pays or certifies checks. In charge of the signature book or cards bearing the authorized signatures of all depositors...
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...manual system Account Information System of their students. The information are stored and compiled in some sort of filing cabinets and may take a long time to retrieve the data and information especially when the account is for old students of the school. In all it can take minutes finding the relevant account information of the students. Students Account Information System manages student records and account information. A SAIS may handle student’s information system, payments information, accounts and balances. They can be use to run complex enrolment reports, admissions, examinations schedules and student payments with the help or via SMS Support. A SAIS helps the institutions manage various operations including student information and administrative. A SAIS allows for the quick and more accessible flow of information. A SAIS provides the accounting department specially bookkeeping staff with useful tools to automate the daily routine of simple task. In this system, a desktop application design for the use of the institution to minimize the work and burden of the accounting department. To optimize and configure accomplish specific information handling operation, such as computation, processing and storage of information. By implementing a SAIS to manage daily student’s accounts, accountant and bookkeeper can save time and have immediate access to a variety of student data. A SAIS allows a quick and easy way to communicate and notify about their children accounts and balances...
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...Andrew Dang ACTG440 Case 3 1. a. The auditor would have identified the defalcation through review of operational procedures. By reviewing the operational procedures, he/she would have noticed that there was no segregation of duties when it came to receiving and recording the income earned. b. The auditor would have most likely detected the defalcation when confirming accounts receivable with a large statistical sample. He/she probably would have performed a cash trace and noticed the receipts not matching up with accounts receivable postings. c. A control procedure that would have been effective in preventing this defalcation is having segregation of duties. By having another employee record the income earned from the city’s pension fund, the treasurer would not have been able to divert any of the funds for himself. 2. a) The auditor would have identified the risk that led to billing schemes through analysis of financial results. b) The defalcation most likely would have been detected by the auditor when going through the financial statements and identifying the fluctuation in sales. He/she would probably verify that the vendor was real and noticed the defalcation. c) A control procedure that would have been effective in preventing or detecting this defalcation is to implement authorization controls on approval of purchase orders. Authorization of purchase orders would include detective controls such as investigating orders to see...
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...PROBLEM 5-2A | June 1 Merchandise Inventory 960 Accounts Payable 960 3 Accounts Receivable 1,200 Sales 1,200 Cost of Goods Sold 720 Merchandise Inventory 720 6 Accounts Payable 60 Merchandise Inventory 60 9 Accounts Payable ($960 – $60) 900 Merchandise Inventory ($900 X .02) 18 Cash 882 15 Cash 1,200 Accounts Receivable 1,200 17 Accounts Receivable 1,400 Sales 1,400 Cost of Goods Sold 840 Merchandise Inventory 840 20 Merchandise Inventory 720 Accounts Payable 720 24 Cash 1,372 Sales Discounts ($1,400 X .02) 28 Accounts Receivable 1,400 PROBLEM 5-2A (Continued) June 26 Accounts Payable 720 Merchandise Inventory (720 X .01) 7 Cash 713 28 Accounts Receivable 1,300 Sales 1,300 Cost of Goods Sold 780 Merchandise Inventory 780 30 Sales Returns and Allowances 150 Accounts Receivable 150 Merchandise Inventory 90 Cost of Goods Sold 90 PROBLEM 5-3B | (a) General Journal Date | | Account Titles | | Debit | |...
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...The word consignment can be generally defined as the act of sending a quantity of goods by the manufacturers and producers of one country or place to their agents in another at the risk of the principals for the purpose of sale. Goods so sent are known as "consignment". The sender of the goods is called the consignor. Generally the manufacturers or producers are consignors. The person to whom goods are forwarded for the purpose of sale is known as the consignee. The consignment can be classified as: 1. Outward consignment. 2. Inward consignment. It is called "outward" when the dispatch of a quantity of goods from one country to another is made for the purpose of sale and is called "inward" when the receipt of the quantity of goods is made for the purpose of sale. Goods sent on consignment do not become the property of the consignee. He has not bought them. The ownership remains with the sender or the consigner. If the goods are destroyed, the receiver (consignee) is not responsible. The loss will fall on the consignor. The consignee tries to sell the goods according to the instructions of the consignor. When the goods have been sold, he will deduct his expenses, commission, etc., from the sale proceeds and the balance is remitted to the consignor. The relationship between the consignor and the consignee is that of principle and agent. The consignee is the agent. The consignee acts entirely on behalf of the consignor. The consignee is entitled to his remuneration which...
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...P202,500 P880,000 (850,000) P 30,000 c MIP inventory, beginning Raw materials purchased MIP inventory, ending Materials to be backflushed to finished goods Conversion costs to be backflushed to finished goods 4. P 38,700 680,000 ( 41,900) P676,800 P 5,300 c Raw materials purchased Materials used: (21,000 x P25) MIP inventory, ending Raw materials used Conversion costs (21,000 x P20) Finished goods Cost of goods sold (20,000 x P45) Finished goods inventory, ending 5. P550,000 (525,000) P 25,000 P525,000 420,000 945,000 (900,000) P 45,000 a Raw materials purchased Materials standard cost: (192,000 x P26) MIP Inventory, ending P5,300,000 ( 4,992,000) P 308,000 Cost of goods sold: (192,000 x P41) P7,872,000 2 6. d Materials in April 1 MIP inventory balance: (31,000 – P1,400) P 29,600 Materials received during April 367,000 Materials in April 30 MIP, per physical count (P33,000–P1,800) ( 31,200) Amount to be backflushed P 365,400 7. c Materials in May 1 MIP balance: (P12,300 – P1,300) Materials received during May Materials in May 31 MIP balance: (P12,100 – P2,100) Amount to be backflused 8. c Applied conversion costs Actual conversion costs incurred: Direct labor Factory overhead Overapplied conversion costs 9. P1,300,000 P200,000 995,000 1,195,000 P 105,000 c Materials used Applied...
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...Manufacturing uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2010, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $20,000, direct labor $12,000, and manufacturing overhead $16,000. As of January 1, Job No. 49 had been completed at a cost of $90,000 and was part of finished goods inventory. There was a $15,000 balance in the Raw Materials Inventory account. During the month of January, Garcia Manufacturing began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $122,000 and $158,000, respectively. The following additional events occurred during the month. Purchased additional raw materials of $90,000 on account. Incurred factory labor costs of $65,000. Of this amount $16,000 related to employer payroll taxes. Incurred manufacturing overhead costs as follows: indirect materials $17,000; indirect labor $15,000; depreciation expense $19,000, and various other manufacturing overhead costs on account $20,000. Assigned direct materials and direct labor to jobs as follows. Job No. Direct Materials Direct Labor 50 $10,000 $ 5,000 51 39,000 25,000 52 30,000 20,000 Calculate the predetermined overhead rate for 2010, assuming Garcia Manufacturing estimates total manufacturing overhead costs of $1,050,000, direct labor costs of $700,000, and direct labor...
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...locations is not standardized. In addition, many different approaches are taken in establishing internal accounting and reporting systems for companies operating through outlying locations. Distinction between Sales Agency and Branch The difference between a sales agency and a branch most often has to do with the degree of autonomy. A sales agency, sometimes referred to simply as an “agency,” usually is not an autonomous operation but acts on behalf of the home office. The agency may display and demonstrate sample merchandise, take orders, and arrange for delivery. The orders typically are filled by the home office because a sales agency usually does not stock inventory. Merchandise selection, advertising, granting of credit, collection on accounts, and other aspects of operating the...
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...income taxes on its net income and the owner is also required to pay income taxes on withdrawals. B. In a partnership, both partners are required to claim their share of net income on their tax returns. C. Corporations must pay income taxes on their net income, and their stockholders must pay income taxes on their dividends. D. A sole proprietorship must pay income taxes to both the state government and the federal government. 2. Which of the following is not considered an advantage of the corporate form of business organization? A. Ability to raise capital. B. Government regulation. C. Ease of transferability of ownership. D. Continuity of existence. 3. Which of the following entities would have the “Paid-in Capital in Excess” account in the equity section of the balance sheet? A. A sole proprietorship. B. A city. C. A corporation. D. A partnership. 4. Which of the following terms designates the maximum number of shares of stock that a corporation may issue? A. number of shares outstanding B. number of shares authorized C. treasury stock D. number of shares issued 5. Which of the following statements best describes the term “par value?” A. an amount used in determining a corporation’s legal capital. B. the amount that must be paid to purchase a share of stock. C. determined by dividing total stockholder’s equity by the number of shares of stock. D. the number of shares currently in the hands of stockholders. 6. Flint Corp. issued 10,000 shares of no-par...
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...the firm's current liability accounts. The management of current liabilities requires choosing appropriate levels of financing and involves trade-offs between risk and profitability. This chapter also reviews sources of secured and unsecured short-term financing, including the role of international loans. Spontaneous sources, such as accounts payable and accruals, are differentiated from negotiated bank sources, such as lines of credit. The cash discount offered on accounts payable and the costs of forgoing the discount are described. Secured sources include bank and commercial finance company loans backed by collateral such as inventory or accounts receivable. PMF DISK This chapter's topics are not covered on the PMF Tutor or the PMF Problem-Solver. PMF Templates The following spreadsheet template is provided: Problem 15-8 Topic Cost of bank loan Find out more at www.kawsarbd1.weebly.com 393 Last saved and edited by Md.Kawsar Siddiqui Part 5 Short-Term Financial Decisions Study Guide The following Study Guide examples are suggested for classroom presentation: Example 1 4 Topic Loss of loan discounts Accounts receivable as collateral Find out more at www.kawsarbd1.weebly.com 394 Last saved and edited by Md.Kawsar Siddiqui Chapter 15 Current Liabilities Management ANSWERS TO REVIEW QUESTIONS 15-1 The two key sources of spontaneous short-term financing (financing that arises from the normal operating cycle) are accounts payable and accruals. Both...
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...FRANK WOOD’S business accounting TENTH EDITION 1 FRANK WOOD & ALAN SANGSTER Additional student support at www.pearsoned.co.uk/wood FRANK WOOD’S business accounting 1 Visit the Business Accounting, tenth edition Companion Website at www.pearsoned.co.uk/wood to find valuable student learning material including: l l l l l l Learning objectives for each chapter Multiple choice questions to help test your learning Review questions and answers Links to relevant sites on the web Searchable online glossary Flashcards to test your knowledge of key terms and definitions Frank Wood 1926–2000 FRANK WOOD’S business accounting TENTH EDITION 1 FRANK WOOD BSc (Econ), FCA and ALAN SANGSTER BA, MSc, Cert TESOL, CA Pearson Education Limited Edinburgh Gate Harlow Essex CM20 2JE and Associated Companies throughout the world. Visit us on the World Wide Web at www.pearsoned.co.uk First edition published in 1967 Second edition published under the Longman imprint in 1972 Third edition published in 1979 Fourth edition published in 1984 Fifth edition published in 1989 Sixth edition published in 1993 Seventh edition published in 1996 Eighth edition published under the Financial Times Pitman Publishing imprint in 1999 Ninth edition published in 2002 Tenth edition published 2005 © Frank Wood 1967 © Longman Group UK Limited 1972, 1979, 1984, 1989, 1993 © Pearson Professional Limited 1996 © Financial Times Professional Limited 1999 © Pearson Education Limited...
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...CHAPTER 6: CASH, TEMPORARY INVESTMENTS, ACCOUNTS RECEIVABLE and NOTES RECEIVABLE PROBLEM SOLUTIONS Assessing Your Recall Cash: Probable Future Value – The probable future value in cash is the ability of the cash to be exchanged for goods and services in the future. Ownership – Ownership is evidenced by possession of currency and by the right to control bank accounts. Temporary Investments: Probable Future Value - The probable future value in temporary investments is the cash payments that will be received from the investments in the future. These payments take the form of dividends in the case of shares and interest in the case of debt as well as the ultimate sales price of the securities when they are sold. Ownership – Ownership is evidenced by share or debt certificates although sometimes these documents are not distributed to the owners but a record is kept by the brokerage house that handles the investments for the company. Account Receivable: Probable Future Value – The probable future value in accounts receivable is that they represent the right to receive cash at some (usually fixed) date in the future. The cash, in turn, has value in the ability to be exchanged for goods and services in the future. Ownership – Ownership is evidenced by contracts either written or implied between the buyer and the seller. Invoices and shipping documents usually provide the necessary evidence of proof that a receivable exits. Notes Receivable: Probable Future Value –...
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...appearing on the next few pages, we will trace how costs flow through Reeder Company’s job-order costing system. 1. Summary journal entries for the year for Reeder Company appear below: a. Raw materials were purchased on account for $150,000. Raw Materials 150,000 Accounts Payable 150,000 b. Raw materials that cost $160,000 were issued from the storeroom for use in production. Of this total, $136,000 was for direct materials and $24,000 for indirect materials. Work in Process 136,000 Manufacturing Overhead 24,000 Raw Materials 160,000 Note: Actual manufacturing overhead costs incurred are debited to a control account called Manufacturing Overhead. c. The following costs were incurred for employee services: direct labor, $200,000; indirect labor, $85,000; selling and administrative wages and salaries, $90,000. Work in Process 200,000 Manufacturing Overhead 85,000 Wage and Salary Expense 90,000 Salaries and Wages Payable 375,000 d. Utility costs of $40,000 were incurred in the factory. Manufacturing Overhead 40,000 Accounts Payable (or Cash) 40,000 e. Prepaid insurance of $20,000 expired during the year. (80% related to factory operations and 20% to selling and administration.) Manufacturing Overhead 16,000 Insurance Expense 4,000 Prepaid Insurance 20,000 f. Advertising costs of $100,000 were incurred during the year. Advertising Expense 100,000 Accounts Payable (or Cash) 100,000 g. Depreciation of...
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