account questions

Q4.

internal control involves the procedures that are put in place to protect vital assets of a business.

inventory is one of these vital assets.

write an essay in which you

1.describe the features of a periodic inventory system compared to the perpetual inventory system.

2.discuss the advantages that the perpetual system has over the periodic system.

3.describe other interal controls that should be put in place to protect inventory.

Q5.

outline key interal controls that should be put in place to protect the non-current assets of a business.

Q6.

winnie's cleaning business purchased a floor polishing machine and paod $5000 cash on the 1 jul 01.

(a).is the above item an ASSET using the 'framework' definition?

(b)should the above item be included in winnie's business balance sheet?

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  • 1 decade ago
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    Q4.

    1. a) Periodic inventory system does not track of inventory, except periodically, and cannot distinguish between goods sold and goods stolen, lost and destroyed. b) Perpetual inventory system is more common recently because of scanner devices, it requires more record keeping than periodic system does and provides continual information regarding what was sold, where and when it was sold, and at what exactly price.

    2. A perpetual inventory system will be more specific in distinguishing between cost of goods sold and cost of goods lost and stolen. The total, however, will equal the same number produced by a periodic system for cost of goods sold.

    3. Another internal control:

    Set the best procedure for taking inventory and make 2 accounting office employees responsible. One to complete the actual physical accounting, and another one to compare with the perpetual inventory card figure and then record the actual count on an inventory sheet.

    Answers of Q5 and Q6 are coming soon...

    2009-04-27 19:49:14 補充:

    Q5. Make an accounting employee responsible for taking non-current assets such as fixed assets annually, and to verify any badly condition items need to be disposed.

    Q6. a) Yes.

    b) Yes, the transaction is debited in machinery and credited in cash.

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