finance records

Question 1

Importance of keeping accurate records​

Answer 1

Ensure correct goods are delivered in correct quantities​

Check customers aren’t being under or overcharged​

Ensure there is enough stock to meet customer demand​

Ensure calculations of costs and revenues are accurate​

To ensure enterprise and customer have a clear understanding of the terms of sale​

Enable the enterprise to accurately calculate the taxes it owes the government​

To allow managers to make strategic decisions​

Question 2

Problems with inaccurate records​

Answer 2

Profits may be over or understated​

Not all costs are accounted for​

Investors may lose confidence in the business​

Reputation for the business can be damaged​

Financial statements will not be accurate​

It an lead to cash-flow problems​

Suppliers and other trade payables may not be paid on time​

Bad debts can increase​