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Please summarize of the given above of (purchase cycle system )of the company

Please summarize of the given above of (purchase cycle system )of the company

FINANCIAL ACCOUNTING
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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Please summarize of the given above of (purchase cycle system )of the company.

WEAKNESS OF THE SYSTEM RECOMMENDATION Supplier-related issues Finding a right Evaluation & monitoring supplier performance supplier. Vendor performance impact regarding their quality guidelines & delivery time completion of purchase cycle on timeline ensure smooth functioning of purchase cycle. provided. Purchase from a licensed wholesaler Before making a purchase order, there should should be ensured that the wholesaler has a be an analysis to ensure a safe purchasing license to sell the product. cycle. The company can identify first that the seller has a license to sell the wine in the market. Lack of segregation of duties – as there is no To prevent misuse of influence or error when second officer to doublecheck the orders, doing the job, there should be a simple invoices and reports made by the clerk. delegation of duties for the person in charge as should be performed by 2 staff. No proper records of requirement; ignorance A safety bracket is to be maintained, for of procedure for ordering and storing on the example wine bottles may not reach in time due stock part. to disputes, breakage and thus purchase manager should have stock to last till these issues are resolved. Lack of accurate data: Due to lack of accuracy Purchase manager must make through in the data of the inventory purchase evaluation of the stock and must maintain department may give wrong orders that might accurate data of inventory example check the create excess of inventory amount and quality of goods and its supporting documents to ensure that they are correct
Transcribed Image Text:WEAKNESS OF THE SYSTEM RECOMMENDATION Supplier-related issues Finding a right Evaluation & monitoring supplier performance supplier. Vendor performance impact regarding their quality guidelines & delivery time completion of purchase cycle on timeline ensure smooth functioning of purchase cycle. provided. Purchase from a licensed wholesaler Before making a purchase order, there should should be ensured that the wholesaler has a be an analysis to ensure a safe purchasing license to sell the product. cycle. The company can identify first that the seller has a license to sell the wine in the market. Lack of segregation of duties – as there is no To prevent misuse of influence or error when second officer to doublecheck the orders, doing the job, there should be a simple invoices and reports made by the clerk. delegation of duties for the person in charge as should be performed by 2 staff. No proper records of requirement; ignorance A safety bracket is to be maintained, for of procedure for ordering and storing on the example wine bottles may not reach in time due stock part. to disputes, breakage and thus purchase manager should have stock to last till these issues are resolved. Lack of accurate data: Due to lack of accuracy Purchase manager must make through in the data of the inventory purchase evaluation of the stock and must maintain department may give wrong orders that might accurate data of inventory example check the create excess of inventory amount and quality of goods and its supporting documents to ensure that they are correct
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