Incomplete Records

Question 1

Give 4 drawbacks of incomplete records

Answer 1

• Cost of accountants time
• Lack of up to date management information
• Statements sent to trade receivables may be inaccurate
• Dangers of loss or theft of cash or inventory
• Lack of accuracy
• Additional costs incurred
• Reliability of the figures may be questioned
• Lack of independent verification
• Items may be missed from the final accounts

Question 2

Give 2 measures to prevent cash losses

Answer 2

• bank on a daily basis or put in a safe
• invest in security e.g. cameras
• try to avoid using cash, use bank transfers
• so bank reconciliations on a regular basis

Question 3

Give two ways you can prevent inventory losses

Answer 3

• security (CCTV, locks)
• reduce amount of stock held