You Are the New Manager of Marsdon Company

question 1

Essay

You are the new manager of Marsdon Company. The company distributes goods throughout the Rocky Mountain area. Customers are billed after the shipments are sent. Most customers pay within two weeks. You notice that one employee is responsible for opening all incoming payments, recording them in the accounting records, and depositing all receipts in the bank daily. When asked why this one person performed all of these duties, you were told that it was more efficient for one person to handle cash and to keep track of things. If any cash was missing, responsibility could be easily determined. Do you agree with this arrangement? If you were to make changes, what would you do, and why?

Describe the legal lending capabilities of individual banks.

Explain the process and impact of open market operations conducted by the Federal Reserve.

Recognize the historical changes within the Federal Reserve District Banks since their establishment.

Analyze the effects of open market operations on bond prices and interest rates.

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Definitions:

Shareholders' Equity

The residual interest in the assets of a corporation after deducting its liabilities, representing what the shareholders own outright.

Consolidated Balance Sheet

A financial statement that aggregates the financial position of a parent company and its subsidiaries, showing total assets minus liabilities.

Fair Value Enterprise Method

involves estimating the value of an entire business using discounted cash flows or market comparables, focusing on the enterprise as a whole.

Liabilities Section

Part of a financial statement that lists what a company owes to others, like loans and payables.