incomplete records

Question 1

what are 6 disadvantages of keeping incomplete records

Answer 1

• doesnt meet tax regulations about keeping accurate records
• has to pay higher fees for an accountant at the end of the year to produce financial statements/ harder for owners to produce financial statements
• the owner is less able to accurately monitor the performance of the business
• lack of info about money owed to payables and how much receivables owe you
• more danger of cash or goods being stolen
• inadequate evidence to support bank loans

Question 2

whats inventory turnover (times)

Answer 2

cost of sales / average inventory

Question 3

whats average inventory (days)

Answer 3

average inventory / cost of sales x 365

Question 4

what are the three main credits on a cash account

Answer 4

cash banked
cash drawing
cash expenses