Using Ledger Accounts for Accumulation and Analysis The owner of Dozee Corporation sometimes fails to record an account payable or a reduction in cash when purchases are made. At the start of each month, it typically takes several days to compile the information needed to prepare Dozee’s financial statements for the preceding month. With some frequency, the accounts don’t balance and an owner’s

“fudge factor” has to be added or deducted in order to get the balance sheet to balance.

a. How would the use of double-entry bookkeeping improve the accuracy of Dozee’s financial statements?

b. How would the use of ledger accounts improve the accuracy of Dozee’s accounting system?

c. In what way would the value of the ledger accounts be diminished if the assistant bookkeeper entered amounts in the correct ledger accounts, but became confused and randomly entered the amounts as debits or credits?