Accounting Questions

Question 1
Despite being the first time to have done that, it is still a problem. Taking money from
petty cash is considered stealing, which is a problem and not correct. If the company realizes that
the little money is being used for other reasons, it will be easy to lose the job. Legally, it is
possible to be prosecuted, but the amount of $30 is small. The best action that needs to be taken
is to pay back the money taken from the petty cash. Also, despite not being caught, there is a
need to take full responsibility since it is unethical. The focus should be on not borrowing from
any other account since it will increase the amount making it more challenging to settle. After
refunding the amount, it will be necessary to make all the employees understand the valid
reasons for using petty cash. Petty cash is a nominal amount that has been merited to pay
expenses that are too small to use a check. However, buying lunch is not one of the reasons why
petty cash should be used. The action taken is unethical, and there is a need for action to be
taken.
Question 2
Most of the businesses offer credits to companies hoping that they will increase their
amount of sales. However, there is a need to keep track of the changes that are taking place. That
is where the aging of accounts receivable comes into action. The main reason for using the
accounts receivables is to monitor the credit account of the customers so that there is an
assurance they will be able to pay all their debt on time. It is a good idea to see a bank offering
credit to a business venture, but it is not possible to know who will pay and who will not—the
changes that the owners expect to be made and massive. However, the best approach to apply in
the scenario is to adjust the bad debts. The focus will be on following the guidelines provided by

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GAAP. The policies and standards will assist in regulating the bad debts to a flat of 3% of the
receivables. The focus will be on settling the amounts that can be done within a short period and
asking for an extension for overdue ones.
Question 3
The firm has been applying the straight-line approach but wants to change to the double-
declining balance method. I feel that there are two strategies for carrying out it compared to the
tax accountant handling the situation. I would focus more on the valuation of running it the way
the tax accountant had suggested using the straight-line methods. The main intention will be to
establish which approaches will best serve the organization’s needs before proceeding. It will
offer a projection of where the company is estimated to be in the next five years. Since there is
an increase in projected sales, it will be more effective and efficient to focus on the double-
declining method. A key consideration is that clear communication should be made if changes
are supposed to be made so that every stakeholder and party involved can follow through.
Additionally, most accountants will not steer the company in the wrong direction, and
considering the option given can be an alternative. The focus will be on evaluating the most
effective strategy between the two that will be applicable in the scenario.