Question

1. Meg Ryan, the bookkeeper of Logan Co., was scheduled to leave on a three-week vacation at
5:00 on Friday. She couldn’t get the company’s trial balance to balance. At 4:30, she decided to
put in fictitious figures in her computer to make it balance. Meg told herself she would fix it
when she got back from her vacation. Was Meg right or wrong to do this? Why?
2. Not all businesses have or need an accounting cycle. Agree or disagree and defend your
position.
3. With computers today, ledgers are not needed in today’s accounting system. Agree or disagree
and defend your position.
4. Posting means updating the journal. Agree or disagree? Please comment.
5. Discuss the concept of cross-referencin

Answer 1

1) Meg Ryan was wrong in doing this action. By using false values so that she can temporarily balance the trial balance was not a ethical action as per the accounting standards. The affects of her action might be seen on the decisions of the managers who will refer the trial balance to know the performance of the company. Even if she fix it after her vacations the trail balance will be falsely balanced for that amount of time and if any decision is made based on that trail balance, that will affect the company.

2) I disagree to this. The accounting cycle is an important aspect for the company even if the it is a small business or any different kind of business. Not every business can have full time accounting departments, for accounting methods or practices the business refers to the accounting cycle.

3) I agree with this. The generation of ledger means duplication of data. In computerised accounting, the duplication of data is not done. The entries are presented in a report. The ledger is not necessarily required for the trial balance. The computer used the store data to make trial balance.

4) I disagree with this. Posting in accounting means transferring the journal entries into the ledger. In accounting the term post or posting means recording the transaction.

5) The cross-referencing in accounting means confirmation of balances when two accounts are related to each other. Cross referencing means practice of adding related accounting information to other location. For example, net asset in balance sheet should be crossed refered to the notes of the asset in financial statements.