Jul 21, 2017 Research papers

Does recording the transaction in the general journal rather than in the cash payments journal affect the amounts of cash and total expenses reported in the financial statements?

This paper concentrates on the primary theme of Does recording the transaction in the general journal rather than in the cash payments journal affect the amounts of cash and total expenses reported in the financial statements? in which you have to explain and evaluate its intricate aspects in detail. In addition to this, this paper has been reviewed and purchased by most of the students hence; it has been rated 4.8 points on the scale of 5 points. Besides, the price of this paper starts from £ 40. For more details and full access to the paper, please refer to the site.

Student Post Review

INSTRUCTIONS:

First page (less if needed) write a review of a students post. I have also included the topic. 



Topic 

On a recent trip to Africa, J.T. Brown, sales manager of Prompt Technology, took his wife along at company expense. Linda White, vice president of sales and Brown`s boss, thought his travel and entertainment expenses seemed excessive. But White approved the reimbursement because she owed Brown a favor. White was aware that the company president reviews all expenses recorded in the cash payments journal, so White recorded Brown`s wife`s expenses in the general journal as follows:



Step 2 Post the following to the discussion board.



Respond to the following questions and, if appropriate, include personal experience as part of your answers.

Does recording the transaction in the general journal rather than in the cash payments journal affect the amounts of cash and total expenses reported in the financial statements?

Why did White record these expenses in the general journal?

What is the ethical issue in this situation? What role does accounting play in this issue? 



Response: 



Does recording the transaction in the general journal rather than in the cash payments journal affect the amounts of cash and total expenses reported in the financial statements?



If these expenses are not recorded in the appropriate account, they will certainly affect other accounts. In this case, the cash payments journal would be the appropriate journal to record the transaction. This is because it was a company expense; the employee is to receive a reimbursement payment from the company for his expenses. Since the cash payments journal is a very specific type of journal, it would not be appropriate to place the reimbursement in the “general journal.”



Why did White record these expenses in the general journal?



Aside from owing brown a favor, White recorded the expenses in the general journal because it would help hide the transaction from the president (who oversees everything), and it would allow White to revise the transaction at the end of the period. 



What is the ethical issue in this situation? What role does accounting play in this issue?



The actions of White (and Brown) are unethical in this case. Brown’s actions were unethical because he used a company vacation for personal gain; he essentially stole money from his company because he claimed all personal expenses as his business expense. White’s actions were unethical because she approved the reimbursement although she knew it was an excessively high amount, despite conducting a proper investigation, or obtaining proof of the expenses. Additionally, White tried to hide the approval from the president (her boss), by recording it in the general journal, instead of the cash payments journal. 



Second page: Read and answer all questions: Topic: Mel O`Conner owns rental properties in Michigan. Each property has a manager who collects rent, arranges for repairs, and runs advertisements in local newspapers. The property managers transfer cash to O`Conner monthly and prepare their own bank reconciliations. The manager in Lansing has been stealing from the company. To cover the theft, he understates the amount of the outstanding checks on the monthly bank reconciliation. As a result, each monthly bank reconciliation appears to balance. However, the balance sheet reports more cash than O`Conner actually has in the bank. In negotiating the sale of the Lansing property, O`Conner is showing the balance sheet to prospective investors.



Step 2 Post to the discussion board.



Respond to the following questions and, if appropriate, include personal experience as part of your answers.

Identify two parties other than O`Conner who can be harmed by this theft. In what ways can they be harmed?

Discuss the role accounting plays in this situation. What internal controls could be put in place to prevent this type of theft? 

CONTENT:

Discussions Name Institutional Affiliation Student Post Review The student supported the move to take Brown’s wife’s expenses as company expenses. I, on the other hand, believe that Brown should not be allowed to present his wife’s expenses as company expenses since his wife was not included in the travel itinerary. This is one of the weak points in the response of the student, seeing that Brown should not be allowed to cash in favors for company fu

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