Homework answers / question archive / Question 1:Simple Sales System Asales system for a small retail store is described in the following paragraph As a sale occurs ,customer details including customer number and address , as well as the items purchased , are written on a blank invoice form

Question 1:Simple Sales System Asales system for a small retail store is described in the following paragraph As a sale occurs ,customer details including customer number and address , as well as the items purchased , are written on a blank invoice form

Accounting

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Question 1:Simple Sales System

Asales system for a small retail store is described in the following paragraph

As a sale occurs ,customer details including customer number and address , as well as the items purchased , are written on a blank invoice form . Item descriptions , quantity sold and unit price are also filled in, with the sales staff having some discretion in setting the unit price for situations such as bulk purchases or repeat customers

These invoice forms are collected at the end of the day and keyed in to the computer, with an invoice number assigned to invoices as they are keyed in. This number is recorded on the store copy of the invoice Any new customers are added to the customer master list as their sales are entered and any details not gathered on the invoice are left blank. Data are stored on a central server and this server is backed up monthly .The system is also connected to the organisation's suppliers and used to order goods .

Required :Identify any risks within the system , the potential consequences of these risks , and controls that could be implemented to mitigate these risks.

Question 2: ABC Computers

ABC Computers sells desktop computer systems that it assembles from parts and software that third -party vendors provide .Customers are both private consumers and small businesses . Consumers pay cash or by credit card , but business customers buy on credit .Sales are made on-line or by a hard -copy order document that customers mail or fax to the company

When a credit order is received ,the sales clerk verifies inventory availability , prepares a sales order and sends the stock release copy to Willy , a warehouse employee ,who picks the goods and arranges shipment Willy then prepares the bills of lading and the shipping notices . Barb in the billing department received the shipping notice from Willy and updates the inventory to account for the reduction in inventory . Barb files the stock release ,prepares the invoice ,and mails a copy of it to the customer .Barb then updates the sales journal and then sends the invoice ,sales order ,stock release and shipping notice to the accounts receivable department

Adam in the accounts receivable department files the documents that Barb sent him and updates the accounts receivable ledger .Mickey in the mail room receives remittance advices and customer cheques sent in payment of accounts .He sends the remittance advice to Adam for posting to the accounts receivable ledger and sends the cheques to Carol , the cash receipts clerk . At the end of the day, she prepares a deposit slip and deposits the cheques into the company's bank account , files the bank receipt and updates the cash receipts journal

Cash sales to consumer customers are handled in asimilar manner to the process described above except that cheques or credit card account numbers are submitted with the original order.

At the end of each week , John , an accounting clerk reconciles all transactions and posts them to the general ledger .

Required :Identify any risks ,the potential consequences of these risks and controls that ABC Computers could implement to reduce exposure to these risks