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Paladinen [302]
2 years ago
14

In a good system of internal control, the person who initiates a transaction should be allowed to effectively control the proces

sing of the transaction through its final inclusion in the accounting records.
a) True
b) False
Business
1 answer:
amm18122 years ago
7 0

Answer:

b) False

Explanation:

One of the key features of a good internal control system is the segregation of duties (SoD).

The principle of the segregation of duties entails that an individual is not allowed to initiate a transaction, review and approve the same transaction. In other words, a good internal control system would not allow an individual carry out all processes for a transaction from initiation, to authorization to approval to recording.

A system in which these responsibilities are shared mitigates against the risk of fraud and error.

Hence, in a good system of internal control, the person who initiates a transaction should be NOT be allowed to effectively control the processing of the transaction through its final inclusion in the accounting records

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According to the model developed in Chapter 3, when government spending increases and taxes increase by an equal amount:
Mariana [72]

Answer:

Correct answer is (B) consumption and investment both decrease.

Explanation:

when government spending increases and taxes increase by an equal amount there will be decrease in both consumption and investment.

7 0
2 years ago
. The organizers of a conference in the Houston Convention Center are evaluating the possibility of setting up a computer area w
Mars2501 [29]

Answer:

They would need to have at least 3 computers

Explanation:

According to the given data we have the following:

Arrival rate = 15 persons per hour

Servicing rate = 60 / 10 = 6 persons per hour with one computer

Servicing rate with x number of computers = 6x per hour

Servicing rate at 90% utilisation = 6x (0.90) = 5.40x per hour

Therefore to service 13 arrivals per hour, we will need x computers = 15/ 5.40 = 2.78

With 2 computers, the service capacity will be 12 per hour and the utilisation will be 15/12 = 125%, which exceeds the organiser’s standard of 90% utilization.

With 3 computers, the service capacity increases to 18 persons per hour. If only 13 persons arrive, the utilisation rate will be 15 / 18 = 83.33%, below the required maximum of 90% utilisation.

Therefore, the 2.78 can be rounded off to next whole number 3 computers

4 0
3 years ago
Read 2 more answers
Lindsey Hunter Corporation is authorized to issue 50,000 shares of $5 par value common stock. During 2020, Lindsey Hunter took p
Law Incorporation [45]

Answer:

Lindsey Hunter Corporation:

a) Journal entry to record item 1:

Debit Cash Account with $225,000

Credit Common Stock with 25,000

Credit APIC Account with $200,000

To record the issue of 5,000 shares of $5 par value at $45 per share

b) Journal entry to record item 2:

Debit Land Account with $50,000

Credit Common Stock with $5,000

Credit APIC Account with $45,000

To record the issue of 1,000 shares $5 par value at $50 per share.

c) Journal entry to record item 3:

Debit Treasury Stock with $21,500

Credit Cash with $21,500

To record the purchase of 500 treasury shares at $43 per share, using the cost method.

Explanation:

a) The costs related to the issuance of the stock totaling $7,000 had been deducted before arriving at $45 issue price.  These costs include attorney, accountants, and underwriting fees.  Companies have two options to treat these costs.  One is to treat them as organization costs and expense them accordingly or apply the costs to reduce the paid-in capital.  The later is the method elected by Lindsey Hunter and it is alright.

b) Company stock can be issued for cash or other assets, as in question 2.  The treatment is similar.  This time, Land is increased instead of cash.  The most important issue is the price at which the land is appraised and not the market value of the stock.  The difference between par value and issue value is credited or debited to the APIC account.

c) The APIC account represents "Additional Paid-in Capital" also described as Share Premium Account.  It is the excess of the issue value over the par value.

d) Treasury stock is company stock that was formerly outstanding and now bought back from stockholders.  It is a reduction of the Equity.  It is created as a contra account.  There are two methods of treating treasury stock.

One method accounts for treasury stock at cost while the second method accounts for it at par.  The difference is that when it is accounted for at cost, the repurchase value is debited to the Treasury account while the credit entry goes to the Cash account.

On the other hand, when it is accounted for at par, the par value is debited to the Treasury account while the difference between par and repurchase value is debited or credited to the APIC account.  The credit entry goes to the Cash account, as always.

8 0
3 years ago
Read 2 more answers
Management of Mcgibboney Corporation has asked your help as an intern in preparing some key reports for November. The beginning
harkovskaia [24]

Answer:

$87,000

Explanation:

Calculation of the conversion cost for November.

Conversion cost can be defined as the combination of both direct labor costs and manufacturing overhead costs that are vital to help convert raw materials into product.

Using this formula

Total Conversion cost = Direct labor cost + Manufacturing overhead cost

Hence,

Direct labor cost $25,000

Add Manufacturing overhead cost $62,000

Total Conversion cost $87,000

Therefore the conversion cost for November is $87,000

4 0
3 years ago
Mahmoud wants to start a business making designer chairs. To do this he will need:​
prisoha [69]
Mahmoud will be needing many things such as. A loan of money , Maybe a wed site to spread him company so more people can see it and materials to build chairs such as wood , springs , foam.
4 0
2 years ago
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