Author Question: Explain whether each of the following would usually be used in a computerized accounting system and ... (Read 69 times)

ghost! · **on:** Jul 5, 2018

Explain whether each of the following would usually be used in a computerized accounting system and why or whynot. 1 . special journals 2 . accounts receivable control accounts 3 . electronic invoice form 4 . month-end postings to the general ledger

Question 2

A hospital that carries no malpractice insurance has several outstanding malpractice claims, including one for 1.5 million.

Hospital attorneys believe the claim can be settled in the range of 200,000 to 340,000, but negotiations have not reached the point where they can estimate where within that range they can reach agreement. How should the hospital handle this claim in its financial statements?
a. report nothing on the face of the statements; in the notes, state that there are claims against the hospital, and that historically it wins some cases and loses others.
b. report an expense and a liability of 270,000, the mid-point of the range.
c. report an expense and a liability of 340,000, the upper end of the range.
d. report an expense and a liability of 200,000, the lower end of the range, and disclose the potential for additional loss in the notes to the statements.

emsimon14 · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

Special journals and accounts receivable control accounts are generally not usedin computerized systems. Instead, electronic forms like electronic invoice formsare used to record original transactions. Since the computer automatically poststransactions from electronic forms to the general ledger and individual accounts atthe time the transactions are recorded, month-end postings are not necessary in acomputerized system.

Answer to Question 2

d