The following is an excerpt from a telephone conversation between Alice Lutz, president of DeSoto Supplies Co., and Victor Hood, owner of Hood Employment Co.

Alice: Victor, you’re going to have to do a better job of finding me a new computer programmer. That last guy was great at programming, but he didn’t have any common sense.

Victor: What do you mean? The guy had a master’s degree with straight A’s.

Alice: Yes, well, last month he developed a new financial reporting system. He said we could do away with manually preparing an end-of-period spreadsheet (work sheet) and financial statements. The computer would automatically generate our financial statements with “a push of a button.”

Victor: So what’s the big deal? Sounds to me like it would save you time and effort.

Alice: Right! The balance sheet showed a minus for supplies!

Victor: Minus supplies? How can that be?

Alice: That’s what I asked.

Victor: So, what did he say?

Alice: Well, after he checked the program, he said that it must be right. The minuses were greater than the pluses. . . .

Victor: Didn’t he know that Supplies can’t have a credit balance—it must have a debit balance?

Alice: He asked me what a debit and credit were.

Victor: I see your point.

1. Comment on

(a) The desirability of computerizing DeSoto Supplies Co.’s financial reporting system,

(b) The elimination of the end-of-period spreadsheet (work sheet) in a computerized accounting system, and

(c) The computer programmer’s lack of accounting knowledge.

2. Explain to the programmer why Supplies could not have a credit balance.