A candy shop buys different types of candies, chocolates and wafers from manufacturers and sells them to the customers. The candy shop owner is finding it difficult to keep track of purchases from different manufacturers, and often does not know when to make payments for the candies. You are an accountant who is helping the owner to establish a strong purchase and payment process.

Based on your understanding of purchase and payment process, answer the following questions for the candy shop owners.

1. Identify five to seven steps for the purchase and payment process of the candy shop.

2. Describe what journal entries will be created for the purchase and payment process.

3. Identify five risks that the candy shop owner is facing because of the lack of an established purchase and payment process.

4. Describe how the risks can be mitigated by the candy shop owner.