Accounts Receivable and Information - 6187 Words

chapter 1 accounting information systems: An overview Suggested Answers to Discussion Questions 1.1 The value of information is the difference between the benefits realized from using that information and the costs of producing it. Would you, or any organization, ever produce information if its expected costs exceeded its benefits? If so, provide some examples. If not, why not? Most organizations produce information only if its value exceeds its cost. However, there are two situations where information may be produced even if its cost exceeds its value. a. It is often difficult to estimate accurately the value of information and the cost of producing it. Therefore, organizations may produce information that they expect†¦show more content†¦While this active learning activity takes more time than a lecture does, it drives the point home much better than a lecture would. It also keeps the students more engaged in the material. 1.4 How do an organization’s business processes and lines of business affect the design of its AIS? Give several examples of how differences among organizations are reflected in their AIS. An organization’s AIS must reflect its business processes and its line of business. For example: * Manufacturing companies will need a set of procedures and documents for the production cycle; non-manufacturing companies do not. * Government agencies need procedures to track separately all inflows and outflows from various funds, to ensure that legal requirements about the use of specific funds are followed. * Financial institutions do not need extensive inventory control systems. * Passenger service companies (e.g., airlines, bus, and trains) generally receive payments in advance of providing services. Therefore, extensive billing and accounts receivable procedures are not needed; instead, they must develop procedures to account for prepaid revenue. * Construction firms typically receive payments at regular intervals, based on the percentage of work completed. Thus, their revenue cycles must be designed to track carefully all work performed and theShow MoreRelatedAcc/291 Week 11178 Words   |  5 Pagesdisposition of accounts receivables? What is their function? Since the majority of US thrive on the use of credit cards, the accounts receivables for a company may no longer be on a cash-to-cash basis. A company may need to sell these accounts to other companies who specialize in handling accounts receivables if they need cash more quickly or if it would be too costly to perform the necessary billing to collect on the account. The entries used to record the disposition when the receivables are soldRead MoreAccounting Cycle 13985 Words   |  4 PagesAccounts Receivable Cycle Riordan Manufacturing, an industry leader in the field of plastic injection molding, has facilities in California, Georgia, Michigan and China. The accounting functions are carried out in each individual location, and consolidated for processing in the corporate offices in California. The Georgia and Michigan locations, being newly acquired, are using systems that are not completely compatible with the corporate offices. This is causing problems on many levels and withinRead MoreBalance Sheet And Income Statements999 Words   |  4 Pagesliabilities. Changes in assets and liabilities affect the owner’s equity. The revenue and expense accounts are recorded in the income statement, while assets, liabilities, and owner s equity are recorded in the balance sheet. The balance sheet and income statements make up the general ledger. The purpose of a subsidiary ledger, also known as a subledger or subaccount, is to show the details of a specific account under the general ledger. The subsidiary ledger updates companies on the spending trends ofRead MoreIntroduction to Control Accounts1640 Words   |  7 PagesIntroduction to Control Accounts †¢ Trade receivables are reported as a current asset and trade payables are reported as current liability in the balance sheet at the end of an accounting period. †¢ It is important, therefore, that a business taken steps to ensure the accuracy of these figures. †¢ One such step is the preparation of Control account to confirm that the total of the sales ledger balances and the total of the purchases ledger balances are accurate What is Control Account? †¢ A controlRead MoreDisclosure Analysis Paper985 Words   |  4 Pagesdisclose financial information to be in compliance with the Security Exchange Commission. The information presented pertains to events that have an impact on the company’s financial position and results (Accounting Tools, 2012). With this purpose in mind, this paper will provide financial information pertaining to Crown Crafts incorporated. The information presented will show an analysis related to the company’s cash, cash equivalents, receivables, and inventory. Also this information will include aRead MoreCase Study : Apple Inc.1732 Words   |  7 Pagesbe resulted from natural disasters, accidents, power disruptions, viruses, etc. (Apple 10-K Pg. 12). The information contained in these IT systems can be stolen, resulting ruined relationships with related consumers/partners. Additionally, this could lead to public legal matters and losses to the company’s finances. Apple uses the PII system. Apple’s 2013 10-K provides the following information about the PII system: The Company requires user names and passwords in order to access its technology systemsRead MoreAccounting Manual On Date Of Shipment And Make Inquiry About Accountants1740 Words   |  7 Pagesdocumentation showing the accounts receivable subsidiary total reconciled to the accounts receivable control account. Alternatively, total the subsidiary and compare the amount to the control account. 13. Obtain client’s documentation showing reconciliation of intercompany receivables and payables for sales and purchases. Alternatively, confirm balances with subsidiaries or other auditors. 14. Select a sample of credit files and trace to customers’ accounts receivable, noting extent of updateRead More2007 04 06 163146 Chapter 7 1 956 Words   |  4 Pagesreported as cash. 1.Checking account balance $925,000; certificate of deposit $1,400,000; cash advance to subsidiary of $980,000; utility deposit paid to gas company $180. $ 2,325,000 Cash balance of $925,000. Only the checking account balance should be reported as cash. The certificates of deposit should be reported as a temporary investment, the cash advance to subsidiary should be reported as accounts receivable, and the utility deposit should be identified as a receivable from the gas company. Read MoreEconomic Impact On The Company1071 Words   |  5 Pagesare what increased the total construction costs, as the increased costs are to cover kickbacks to those involved in the scheme. Misstating Financial Statements- Overstating Revenue through accounts receivable Perpetrators and Pressure: There are some obvious inconsistences between what the accounts receivable being reported was and what our audit team calculated. The perpetrators of this fraud was a combination between Phil Ackers (President) and Julie Roper (Assistant to the President). During ourRead MoreAccounting1016 Words   |  5 PagesThe basic principles of an accounting information system include all of the following  except | |    | Student Answer: | |   cost effectiveness.  (Cost effectiveness is one of the basic principles of accounting information systems.) |    | | |   flexibility.  (Flexibility is one of the basic principles of accounting information systems.) |    | | |   useful output.  (Useful output is one of the basic principles of accounting information systems.) |    | | |   periodicity.  (Correct! Periodicity