Lance Berkman is the controller of Saturn, a dance club whose year-end is December 31. Berkman prepares checks for suppliers in December, makes the proper Journal entries, and posts them to the appropriate accounts in that month. However, he holds on to the checks and mails them to the suppliers in January. Requirements What financial ratio(s) is (are) most affected by the action to hold onto the checks until January? What is Berkman’s purpose in undertaking this activity?

Lance Berkman is the controller of Saturn, a dance club whose year-end is December 31. Berkman prepares checks for suppliers in December, makes the proper Journal entries, and posts them to the appropriate accounts in that month. However, he holds on to the checks and mails them to the suppliers in January. Requirements What financial ratio(s) is (are) most affected by the action to hold onto the checks until January? What is Berkman’s purpose in undertaking this activity?

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter8: Fraud, Internal Controls, And Cash

Section: Chapter Questions

Problem 4TP: The vice president of finance asks the accounts payable (AP) clerk to write a check in the name of...

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