Mandisa Sounds, Inc, a specialty retailer of customized audio systems for automobiles, installed a perpetual inventory system in the second quarter of 2011. The new system allowed the firm to adjust its merchandise inventories to sales patterns more
effectively and to prepare monthly financial statements. Although the system led to an improvement in sales and income, the gross margin on the monthly income statements was falling below both management's expectations and the industry average. At the end of 2014, a physical inventory revealed that actual merchandise inventory was considerably lower than the perpetual inventory records indicated. The merchandise inventories of some stores were off more than others, but all had deficiencies. What probably caused these losses and what steps could be taken to prevent them in the future?
The merchandise inventory losses probably were due to shoplifting and embezzlement. Management must carefully review its controls at the individual stores and install a system that will protect its merchandise inventory from these forms of theft. This goal can be accomplished through an internal control structure that creates an environment that encourages compliance with a company's policies, a good accounting system, and specific activities designed to safeguard the merchandise inventory.
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Kaitlin manages the organization’s employee-related actions to ensure compliance with equal opportunity laws and regulations as well as organizational affirmative action plans. Part of her job also involves managing diverse groups of people within the organization. Kaitlin’s human resource management specialty is ______.
A. training and development B. compensation and benefits C. the legal environment D. ethics and sustainability
A(n) ________ is a straight reduction in price on purchases during a stated period of time or of larger quantities
A) allowance B) free sample C) discount D) tax credit E) quota
Allowance for Uncollectibles contra account appears among the _____ on a firm's balance sheet as a(n) _____
a. liability; subtraction b. liability; addition c. assets; addition d. assets; subtraction e. shareholders' equity; subtraction
Executives must be careful to avoid spending so much time and effort tracking the actions of ________ that they ignore ________.
A. traditional competitors; new competitors B. competitors; customers C. existing customers; existing competitors D. customers; competitors