You Are Recently Employed As A Business Analyst At Adam Co A Perth Based Wholesaler 3837425

You are recently employed as a business analyst at Adam & Co, a Perth-based wholesaler of industrial
supplies. Adam & Co sources its inventories from manufacturers in China, Thailand and Vietnam. The
company has a centralised accounting system with networked terminals at different locations. Adam
& Co’s expenditure cycle procedures are described as follow:
Purchases System
The process begins when the purchasing clerk checks the inventory subsidiary ledger at his/her
computer terminal each morning. When the quantity of an item is deemed to be too low, the clerk
selects a vendor from the valid vendor file and prepares a digital purchase order. The clerk prints two
hard copies: one copy is sent to the vendor, and the other is filed in the purchasing department.
Digital purchase order record is added to the purchase order file.
When the goods arrive in the receiving department, the receiving clerk inspects them and reconciles
the items against the information in the digital purchase order and the packing slip. The clerk then
manually prepares two hard copies of the receiving reports. One of these accompanies the goods to
the inventory warehouse, where the clerks shelves the goods and updates the inventory subsidiary
ledger from his/her computer terminal. The clerk then files the receiving report in the department.
The other copy of the receiving report is sent to the accounts payable department, where the
accounts payable clerk files it until the supplier’s invoice arrives. When the accounts payable clerk
receives the invoice he pull the receiving report from the temporary file, prints a hard copy of the
digital purchase order, and reconcilesthe three documents. At this time, the clerk updates the digital
accounts payable subsidiary ledger, the accounts payable control account and the inventory control
account in the general ledger from his terminal. The clerk then sends the invoice, receiving report,
and the purchase order copy to the cash disbursement department.
Cash Disbursements System
Upon the receipt of the documents from the accounts payable department, the cash disbursements
clerk files the documents until their payment due date. On the due date, the clerk prepares a cheque
for the invoiced account, when is sent to the treasurer who sign it and mail the cheque to the vendor.
The cash disbursements clerk then updates the cheque register, accounts payable subsidiary ledger,
and the accounts payable control account from his/her computer terminal. Finally, the receiving clerk
files the invoice, purchase order copy, receiving report, and cheque copy in the department.



Prof. Angela


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