Course Hero Logo

148 describe why it is true that there may be two

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 367 - 370 out of 473 pages.

148.Describe why it is true that there may be two authorizations related to revenue,expenditures, and conversion processes before they are posted to the generalledger.Answer: In a properly controlled accounting system, transactions within the revenueand conversion processes must be authorized before they are carried out. In addition,another authorization is needed to begin the process of posting entries from thespecial journals and subsidiary ledgers to the general ledger. Thus, there may be twoauthorizations related to these routine processes.
149.For each report shown, indicate in the appropriate column whether the report islikely to be for internal or external users (some reports may be both), and whetherdata would come exclusively from the general ledger.Report NameInternal or ExternalExclusively G/L Data?Income statementAged accountsreceivableInventory stock statusOpen purchase ordersMachine down-timeCash flow statementProduction unitsproducedAnswer:Report NameInternal or ExternalExclusively G/L Data?Income statementExternalYesAged accountsreceivableBothNoInventory stock statusInternalNoOpen purchase ordersInternalNoMachine down-timeInternalNoCash flow statementExternalNoProduction unitsproducedInternalNoTEST BANK – CHAPTER 12 – PROBLEMS150.Compare source of capital processes with sales processes in terms ofa. the frequency of transactions;b. the volume of transactions;c. the magnitude in dollars of a single transaction; andd. the manner of authorization.Answer: Compared with the sales processes, (a. and b.) source of capital processesoccur much less frequently and in smaller volumes. Whereas sales transactionstypically occur on a daily basis (and may even occur several times per day), source ofcapital transactions tend to occur in small volumes and on an irregular basis. Often,there may be only a few times within any given annual period that a source of capitaltransaction occurs. In addition, (c.) the magnitude of an individual source of capitaltransaction tends to be much greater than for an individual sales transaction. Finally,(d.) whereas routine sales transactions are usually authorized by employees havinggeneral authorization privileges, source of capital transactions require specificauthorization of management.
151.Compare investment processes with sales processes in terms ofa. the frequency of transactions;b. the volume of transactions;c. the magnitude in dollars of a single transaction; andd. the manner of authorization.Answer: Compared with the sales processes, (a. and b.) investment processes occurmuch less frequently and in smaller volumes. Whereas sales transactions typicallyoccur on a daily basis (and may even occur several times per day), investmenttransactions tend to occur in small volumes and on an irregular basis. Often, theremay be only a few times within any given annual period that an investmenttransaction occurs. In addition, (c.) the magnitude of an individual investmenttransaction tends to be much greater than for an individual sales transaction. Finally,(d.) whereas routine sales transactions are usually authorized by employees havinggeneral authorization privileges, investment transactions require specificauthorization of management.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 473 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Spring
Professor
Jane barton
Tags
Management, Computer program, Accounting software

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture