Case #10 - No free entry

Instructor Notes

Before you introduce internal controls make sure your students understand the types of problems they are trying to solve. This simple case gets students thinking about problems businesses face and possible solutions. Once students spend some time coming up with their own internal controls they will be much more interested in internal controls introduced in the chapter.

Difficulty: Medium

Learning Objectives: IFAB 1e Ch. 6 LO 1, FFAC 10e Ch. 6 LO 1, Survey 5e Ch 4 LO 1

Implementation: Distribute copies of the case to the class before providing any explanation of internal controls. Ask students to read the case and individually develop answers. After allowing students time to develop their individual answers, put them into groups to reach consensus on an answer. Also, ask each group to select a spokesperson. Allow groups time to develop answers, then call on some of the spokespersons to share their solutions. As you respond to the student solutions, explain the basic concepts of internal controls.

Handouts and Solution for Case #10 available on Resources Page

No free entry

The Big Screen, Inc. is a movie theater business. On several occasions Bill Seymore, theater owner, noticed that while the theater had a full house, the cash collections from ticket sales were considerably less than the number of seats times the price per ticket.

Discussion Question:

Speculate as to what could be causing this situation and provide a plan for remedying the problem.