Identify 2 weaknesses (being sure that your response identifies why they are weaknesses - what risk they expose the company to) and a recommendation to correct the weakness. • Because of cash flow problems, Lexsteel always pays suppliers on thelast possible day before incurring a penalty for late payment. Supplierinvoices are processed and paid weekly. Every Friday, the accountspayable clerk reviews and approves all invoices with a due date thefollowing week.The purchasing manager reviews and approves all purchases prior toe-mailing them to suppliers.• After counting and inspecting incoming deliveries, the receiving clerkenters the following information into the system:• Quantities received for each inventory item• Date and time receivedSupplier number• After entering that information, the receiving clerk takes the inventory tothe inventory control department for storage.• Access to the inventory control department is restricted.Inventory is only released to production when a properly authorizedrequest is received. When the inventory is released, the inventory controlclerk updates the perpetual inventory system..Physical counts of inventory are taken every three months. Discrepanciesbetween the counts and recorded quantities on hand are investigated.Upon resolution of the investigation, the plant manager authorizesadjustments to the perpetual inventory records to change them to theamount actually on hand.

A weakness in process is any vulnerability which may result in adverse outcome happening in process.…

Answered: Identify 2 weaknesses (being sure that…

Identify 2 weaknesses (being sure that your response identifies why they are weaknesses - what risk they expose the company to) and a recommendation to correct the weakness.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Identify 2 weaknesses (being sure that your response identifies why they are weaknesses - what risk they expose the company to) and a recommendation to correct the weakness.

• Because of cash flow problems, Lexsteel always pays suppliers on the
last possible day before incurring a penalty for late payment. Supplier
invoices are processed and paid weekly. Every Friday, the accounts
payable clerk reviews and approves all invoices with a due date the
following week.
The purchasing manager reviews and approves all purchases prior to
e-mailing them to suppliers.
• After counting and inspecting incoming deliveries, the receiving clerk
enters the following information into the system:
• Quantities received for each inventory item
• Date and time received
Supplier number
• After entering that information, the receiving clerk takes the inventory to
the inventory control department for storage.
• Access to the inventory control department is restricted.
Inventory is only released to production when a properly authorized
request is received. When the inventory is released, the inventory control
clerk updates the perpetual inventory system.
.
Physical counts of inventory are taken every three months. Discrepancies
between the counts and recorded quantities on hand are investigated.
Upon resolution of the investigation, the plant manager authorizes
adjustments to the perpetual inventory records to change them to the
amount actually on hand.

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