Gloria’s Fabrics is a large fabric provider to the general public. The accounting office has three employees: accounts receivable clerk, accounts payable clerk, and a bookkeeper who manages the accounting function in the company. The accounts receivable clerk creates the sales invoices and records the cash receipts. The accounts payable clerk creates and pays purchase orders. The book- keeper manages the accounting function, supervises all accounting office employees, and reconciles the checking account. Review the separation of duties for each employee: the accounts receivable clerk, the accounts payable clerk, and the bookkeeper. Identify the accounts and describe the trans- actions that would be recorded by that assigned job. Evaluate the internal control and the potential for fraud at Gloria’s Fabrics. How would you restructure the job responsibilities of each employee in order to strengthen the internal control of the firm?
> What is the purpose of the Medicare tax?
> How are earnings determined when employees are paid on the hourly rate basis?
> Give two examples of common payroll fraud.
> Does the employee bear any part of the SUTA tax? Explain.
> How are the federal and state unemployment taxes related?
> An essential element of a strong system on internal control and fraud prevention is the segregation of duties of employees. Segregation of duties increases the likelihood that a single employee does not have the ability to steal assets of the business an
> What is an exempt employee?
> What aspects of employment are regulated by the Fair Labor Standards Act? What is another commonly used name for this act?
> What factors affect how much federal income tax must be withheld from an employee’s earnings?
> How does the salary basis differ from the hourly rate basis of paying employees?
> What publication of the Internal Revenue Service provides information about the current federal income tax rates and the procedures that employers should use to withhold federal income tax from an employee’s earnings?
> What is the simplest method for finding the amount of federal income tax to be deducted from an employee’s gross pay?
> What are the four bases for determining employee gross earnings?
> How does the direct deposit method of paying employees operate?
> What is the purpose of the social security tax?
> How does the Fair Labor Standards Act affect the wages paid by many firms? What types of firms are regulated by the act?
> 1. How might a poor set of recording procedures affect the flow of information to management? 2. Why should management be concerned about the efficiency of a firm’s procedures for journalizing and posting transactions? 3. Why should management insist tha
> Why are MICR numbers printed on deposit slips and checks?
> What type of information is entered on a check stub? Why should a check stub be prepared before the check is written?
> What is a check?
> What procedures are used to achieve internal control over banking activities?
> Why are journal entries sometimes needed after the bank reconciliation statement is prepared?
> Give some reasons why the bank balance and the book balance of cash might differ.
> What information is shown on the bank statement?
> Why is a bank reconciliation prepared?
> Explain the meaning of the following terms: a. Canceled check b. Outstanding check c. Deposit in transit d. Debit memorandum e. Credit memorandum f. Dishonored check g. Blank endorsement h. Deposit slip i. Drawee j. Restrictive endorsement k. Payee l. Dr
> Describe the major controls for cash payments.
> A chart of accounts varies with each type of business as well as each company. In a group, compare and contrast the accounts that would appear in Cole’s Real Estate Office, Sarah’s Clothing Emporium, Neal’s Grocery Store, and Tanner Plumbing Service. Wha
> Describe the major controls for cash receipts.
> Explain what bonding means. How does bonding relate to safeguarding cash?
> What is a promissory note? What entry is made to record the collection of a promissory note and interest?
> When are petty cash expenditures entered in a firm’s accounting records?
> Describe the major controls for petty cash.
> How are cash shortages and overages recorded?
> Which type of endorsement is most appropriate for a business to use?
> What is the book balance of cash?
> How is the net delivered cost of purchases computed?
> Why is it useful for a business to have an accounts payable ledger?
> Annual reports released by publicly held companies include a letter to the stockholders written by the chief executive officer, chairman of the board, or president. Analyze Online: Locate the Adobe Systems, Inc., website (www.adobe.com). Within Investor
> What type of accounts are kept in the accounts payable ledger?
> What is a schedule of accounts payable? Why is it prepared?
> What is the relationship of the Accounts Payable account in the general ledger to the accounts payable subsidiary ledger?
> What is a purchase allowance?
> What is a purchase return?
> What is the purpose of a credit memorandum?
> What account is debited for freight charges on merchandise inventory purchases when the perpetual inventory system is used?
> What account is credited for the return of merchandise inventory when the perpetual inventory system is used?
> What account is debited for the purchase of merchandise inventory when the perpetual inventory system is used?
> What do the following credit terms mean? a. n/30 b. 2/10, n/30 c. n/10 EOM d. n/20 e. 1/10, n/20 f. 3/5, n/30 g. n/15 EOM
> 1. As an owner or manager of a business, what questions would you ask to judge the firm’s performance, control operations, make decisions, and plan for the future? 2. Why is financial information important? 3. Besides earning a profit, what other objecti
> Find the X value corresponding to z = 0.75 for each of the following distributions. a. μ = 90 and σ = 4 b. μ = 90 and σ = 8 c. μ = 90 and σ = 12 d. μ = 90 and σ = 20
> You receive your midterm exam scores for four classes. In all four classes, your midterm score was X = 70. Below is the mean and standard deviation for each of your classes. Compute the z-score for each midterm exam score and summarize in words how you p
> A sample has a mean of M = 53 and a standard deviation of s = 11. For this sample, find the z-score for each of the following X values. X = 30 X = 39 X = 70 X = 48 X = 57 X = 64
> Explain how a z-score identifies an exact location in a distribution with a single number.
> Describe the scores in a sample that has a standard deviation of zero.
> Calculate SS, σ 2, and σ for the following population of N = 5 scores: 6, 0, 4, 2, 3.
> Is it possible to obtain a negative value for SS (sum of squared deviations), variance, and standard deviation?
> In words, explain what is measured by variance and standard deviation.
> Calculate the range and interquartile range for the following set of scores from a continuous variable: 23, 13, 10, 8, 10, 9, 11, 12.
> A teacher is interested in the effect of a study session on quiz performance. Two different classes receive a pretest (before the study session) and a posttest (after the study session). Thus, the teacher records the following four sets of scores: a. For
> You are interested in how much time you spend on InstagramTM so you recorded the number of minutes spent browsing your newsfeed each day for three weeks. You obtain the following data: a. Create a grouped frequency distribution table that (i) has the bes
> One population has a mean of μ = 50 and a standard deviation of σ = 15, and a different population has a mean of μ = 50 and a standard deviation of σ = 5. a. Sketch both distributions, labelling μ and σ. b. Would a score of X = 65 be considered an extrem
> If you have ever tried to learn a new mechanical skill, you probably noticed that the hand-eye coordination needed to perform the skill is learned with practice. To demonstrate the effects of such practice, Li (2008) studied the effect of prism goggles o
> Everyone experiences “ups and downs” in life satisfaction. Boehm, Winning, Segerstrom, and Kubzansky (2015) studied whether such variability in life satisfaction is correlated with mortality rate. Over a nine-year peri
> Luhmann, Schimmack, and Eid (2011) were interested in the relationship between income and subjective well-being. The researchers measured participants’ income across time between 1991 and 2006 and observed that both the central tendency
> For the data in the following sample: 1, 1, 9, 1 a. Find the mean, SS, variance, and standard deviation. b. Now change the score of X = 9 to X = 3, and find the new values for SS, variance, and standard deviation. c. Describe how one extreme score influe
> For the following population of N = 6 scores: 2, 9, 6, 8, 9, 8 a. Calculate the range and the standard deviation. (Use either definition for the range—see page 113.) b. Add 2 points to each score and compute the range and standard deviation again. c. Des
> For the following sample of n = 8 scores: 0, 1, 1/2, 0, 3, ½, 0, 1 a. Simplify the arithmetic by first multiplying each score by 2 to obtain a new sample. Then, compute the mean and standard deviation for the new sample. b. Starting with the values you o
> Compute the mean and standard deviation for the following sample of n = 5 scores: 70, 72, 71, 80, and 72. Hint: To simplify the arithmetic, you can subtract 70 points from each score to obtain a new sample. Then, compute the mean and standard deviation f
> A population has a mean of μ = 50 and a standard deviation of σ = 10. a. If 3 points were added to every score in the population, what would be the new values for the mean and standard deviation? b. If every score in the population were multiplied by 2,
> A population has a mean of μ = 100 and a standard deviation of σ = 20. Sketch a frequency distribution for the population and label the mean and standard deviation.
> For each of the following, list the class intervals that would be best for a grouped frequency distribution. a. Lowest X = 3, highest X = 84 b. Lowest X = 17, highest X = 32 c. Lowest X = 52, highest X = 97
> A sample of n = 10 scores has a sample mean of M = 25 and a sample standard deviation of s = 4. What are the values of ∑X and SS?
> A sample of n = 12 scores has a sample mean of M = 60 and a sample standard deviation of s = 3. What are the values of ΣX and SS?
> / for the following set of sample scores: 2, 8, 4, 6, 5. What is your best guess about the actual value of variance in the population?
> Calculate SS, variance, and standard deviation for the following sample of n = 5 scores: 2, 9, 5, 5, 9.
> What is the range for the following set of scores? (You may have more than one answer.) Scores: 6, 12, 9, 17, 11, 4, 14
> Calculate SS, variance, and standard deviation for the following sample of n = 9 scores: 4, 16, 5, 15, 12, 9, 10, 10, 9.
> For the following sample of n 5 6 scores: 0, 11, 5, 10, 5, 5 a. Sketch a histogram showing the sample distribution. b. Locate the value of the sample mean in your sketch, and make an estimate of the standard deviation (as seen in Example 4.6, page 126).
> Explain why the formula for sample variance is different from the formula for population variance. Why is it inappropriate to use the formula for population variance in calculating the variance of a sample?
> For the following set of scores: 6, 2, 3, 0, 4 a. If the scores are a population, what are the variance and standard deviation? b. If the scores are a sample, what are the variance and standard deviation?
> Calculate SS, variance, and standard deviation for the following population of N = 7 scores: 8, 1, 4, 3, 5, 3, 4.
> Based on the following absolute frequency table, calculate each of the following. a. n b. ΣX c. ΣX2
> For the following population of N 5 8 scores: 1, 3, 1, 10, 1, 0, 1, 3 a. Calculate SS, σ2, and σ. b. Which formula should be used to calculate SS? Explain.
> For the following population of N 5 10 scores: 5, 12, 14, 6, 14, 8, 11, 8, 12, 10 a. Sketch a histogram showing the population distribution. b. Locate the value of the population mean in your sketch, and make an estimate of the standard deviation (as see
> Briefly explain the goal for defining and measuring variability.
> A population of N = 7 scores has a mean of μ = 13. What is the value of SX for this population?
> A sample with a mean of M = 8 has ΣX = 56. How many scores are in the sample?
> Which statistic is equivalent to dividing the sum of scores equally across all members of a sample?
> Using the following informal histogram, what is the value of the mean? Explain your answer.
> Find the mean for the following set of scores: 8, 2, 5, 7, 12, 9, 11, 3, 6
> Identify the circumstances in which the median may be better than the mean as a measure of central tendency and explain why.
> Solve the following problems. Find the mean, median, and mode for the scores in the following frequency distribution table. Based on the three values for central tendency, what is the most likely shape for this distribution of scores (symmetrical, positi
> For the following set of scores: a. Construct a frequency distribution table to organize the scores. Include cumulative frequency and cumulative percent. b. What is the percentile rank of the upper real limit of X = 5? c. What is the upper real limit of
> Anderson (1999) was interested in the effects of attention load on reaction time. Participants in her study received a dual-task procedure in which they needed to respond as quickly as possible to a stimulus while simultaneously paying attention to the s
> Solve the following problems. Find the mean, median, and mode for the following scores. Based on the relative values for the mean, median, and mode, what is the most likely shape for this distribution of scores (symmetrical, positively skewed, or negativ
> For the following frequency distribution table, identify the shape of the distribution.
> What shape is the distribution displayed in the following informal histogram? Identify the major and minor modes.
> Find the mean, median, and mode for the following scores: 8, 7, 5, 7, 0, 10, 2, 4, 11, 7, 8, 7
> Find the mean, median, and mode for the distribution of scores in the following frequency distribution table.
