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Question:Assume that you are a cashier and your manager requires that you immediately enter each sale when it occurs. Recently, lunch hour traffic has increased and the assistant manager asks you to avoid delays by taking customers’ cash and making change without entering sales. The assistant manager says she will add up cash and enter sales after lunch. She says that, in this way, customers will be happy and the register record will always match the cash amount when the manager arrives at three o’clock. The advantage to the process proposed by the assistant manager includes improved customer service, fewer delays, and less work for you. The disadvantage is that the assistant manager could steal cash by simply recording less sales than the cash received and then pocketing the excess cash. You decide to reject her suggestion without the manager’s approval and to confront her on the ethics of her suggestion.

Required

Propose and evaluate two other courses of action you might consider, and explain why.

Short Answer

Expert verified

Answer

Two courses of action are –

a) Consultation with the manager

b) Introducing a token system for sales

Step by step solution

01

Course of action one – Consultation with manager

As the problem is only for the lunch hour, so the assistant manager’s solution is quick but needs to be authorized by the manager. If the cashier somehow manages to communicate with the manager and gets a clear message for acceptance or rejection then the ultimate decision can be taken.

02

Course of action one – Generating tokens

Another solution to the problem may be generating tokens to match up the sales. Even if the cashier is not able to communicate with the manager, he can still follow the assistant manager’s suggestion by introducing a token system either manually or automated. This token would enable to count the no. of sales in units and would be an easier way to match up the cash collections with generated tokens.

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Most popular questions from this chapter

Zucker Management Services opened for business and completed these transactions in November.

Nov. 1 Matt Zucker, the owner, invested \(30,000 cash along with \)15,000 of office equipment in the company in exchange for common stock.

2 The company prepaid \(4,500 cash for six months’ rent for an office. (Hint:Debit Prepaid Rent for \)4,500.)

4 The company made credit purchases of office equipment for \(2,500 and of office supplies for \)600. Payment is due within 10 days.

8 The company completed work for a client and immediately received \(3,400 cash.

12 The company completed a \)10,200 project for a client, who must pay within 30 days.

13 The company paid \(3,100 cash to settle the payable created on November 4.

19 The company paid \)1,800 cash for the premium on a 24-month insurance policy.

22 The company received \(5,200 cash as partial payment for the work completed on November 12.

24 The company completed work for another client for \)1,750 on credit.

28 The company paid \(5,300 cash in dividends.

29 The company purchased \)249 of additional office supplies on credit.

30 The company paid $831 cash for this month’s utility bill.

Required

1. Prepare general journal entries to record these transactions (use account titles listed in part 2).

Identify the four financial statements of a business.

Question:Use the information in Exercise 2-7 to prepare a trial balance for Pose-for-Pics. Begin by opening these T-accounts: Cash; Office Supplies; Prepaid Insurance; Photography Equipment; Common Stock; Photography Fees Earned; and Utilities Expense. Then, (1) post the general journal entries to these T-accounts (which will serve as the ledger) and (2) prepare the August 31 trial balance.

Question:Classify each of the following accounts as an asset (A), liability (L), or equity (EQ) account.

a. Cash d. Prepaid Insurance g. Accounts Payable

b. Prepaid Rent e. Office Equipment h. Unearned Rent Revenue

c. Office Supplies f. Common Stock i. Dividends

Question:Karla Tanner opened a web consulting business called Linkworks and completed the following transactions in its first month of operations.

Apr. 1 Tanner invested \(80,000 cash along with office equipment valued at \)26,000 in the company in exchange for common stock.

2 The company prepaid \(9,000 cash for 12 months’ rent for office space. (Hint:Debit Prepaid Rent for \)9,000.)

3 The company made credit purchases for \(8,000 in office equipment and \)3,600 in office supplies. Payment is due within 10 days.

6 The company completed services for a client and immediately received \(4,000 cash.

9 The company completed a \)6,000 project for a client, who must pay within 30 days.

13 The company paid \(11,600 cash to settle the account payable created on April 3.

19 The company paid \)2,400 cash for the premium on a 12-month insurance policy. (Hint:Debit Prepaid Insurance for \(2,400.)

22 The company received \)4,400 cash as partial payment for the work completed on April 9.

25 The company completed work for another client for \(2,890 on credit.

28 The company paid \)5,500 cash in dividends.

29 The company purchased \(600 of additional office supplies on credit.

30 The company paid \)435 cash for this month’s utility bill.

Required

1. Prepare general journal entries to record these transactions (use account titles listed in part 2).

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