(Assessment objectives ...)

Question 5.4

5.4.a

Scenario-

You are employed as a bookkeeper at ABC Company, a medium-sized retail business. Your responsibilities include recording financial transactions, maintaining general ledgers, and ensuring compliance with organisational policies, procedures, and accounting standards. ABC Company has a specific policy regarding the recording of financial transactions.

ABC Company's Financial Transaction Recording Policy:

"All financial transactions must be recorded in the company's accounting software. Manual entry in physical ledger books is not allowed. This policy applies to all departments and employees involved in financial transactions, including sales, purchases, expenses, and payroll. By using the company's designated accounting software, we ensure accurate and consistent recording of transactions, improved data integrity, and streamlined reporting processes. It also enables easier integration with other financial systems and facilitates timely analysis and decision-making. Compliance with this policy is mandatory, and any deviations should be promptly reported to the finance department for resolution."

Question

According to ABC Company's Financial Transaction Recording Policy, what is the preferred method for recording financial transactions? Select the best from option from the list below. Then, explain your answer.

1. Manual entry in physical ledger books
2. Using a spreadsheet software
3. Utilising accounting software

(Approximate word count: 35 - 50 words).

Attach filesSave

5.4.b

Scenario

You are employed as a bookkeeper at XYZ Corporation, a multinational manufacturing company. As a bookkeeper, you are responsible for maintaining accurate financial records and adhering to the company's policies and procedures. One day, you discover an error in the recording of a vendor invoice. The invoice for $5,000 was mistakenly recorded as $50,000, which has led to an incorrect balance in the accounts payable ledger.

According to XYZ Corporation's Accounts Payable Policy:

"When errors are identified in the recording of vendor invoices, it is the responsibility of the bookkeeper to rectify the error promptly. Any discrepancies should be investigated, and corrections must be made in a timely manner. If an overpayment or underpayment has occurred, appropriate adjustments should be made in the financial records. The bookkeeper should communicate with the accounts payable team and the vendor to rectify the situation and ensure accurate reporting."

Question

As a bookkeeper at XYZ Corporation, what is your responsibility when you identify an error in the recording of a vendor invoice? Select the best from option from the list below. Then, explain your answer.

1. Ignore the error since it is a minor discrepancy.
2. Communicate the error to the accounts payable team and the vendor and rectify the error promptly.
3. Wait for approval from the finance manager before making any corrections.

(Approximate word count: 70 - 100 words).