1. What kinds of issues do you believe might arise if a manager of a company did not have a fundamental understanding of accounting?

2. The owner of a small business was taken aback when he reviewed the company's financial statements and discovered that the cash balance of the company had decreased during the month despite the fact that there was a substantial amount of net income?Do you believe it is reasonable for this owner to anticipate an increase in cash flow as a result of a substantial net income? Why or why not?

3. The owner of a company approaches you with a request in which he wants to know whether or not he can charge all of his personal expenses from his company. According to what he said, he is the owner of the company regardless. Talk to the owner of the business about the concept of "business entity assumption" as well as the "ethical considerations" involved with his idea.

 

4. ABC Trading maintains 12 locations and is responsible for a wide range of expenses. Jill, who is in charge of accounts payable at ABC Trading, composes the checks that are given to each of the company's suppliers, and the Accounting Manager signs each check. Jill has come to the conclusion that she requires a salary increase, and the Manager has instructed her to wait for six months. Jill came up with a strategy to secure a pay increase on her own? 

She created a new supplier account for Prime Auto Parts, the company that her friend owns and operates. Jill also drafted checks to pay the bills associated with the purchase orders that she created for Prime Auto Parts, which were for a total of P10,000 and P18,000 respectively. She is aware that the Manager will sign all checks without looking at any of them unless the amount exceeds P30,000. She hands the checks over to her friend, and it is her friend's responsibility to cash the checks and give Jill the money. Is this a good way for Jill to obtain a raise?  

In the long run, what are the effects can we foresee from her actions? How exactly can ABC Trading avoid having another incident like this one?

Answer rating: 100% (QA)

1 If a manager of a company did not have a fundamental understanding of accounting a number of issues could arise Firstly the manager might have a dif... View the full answer