Backlog Ltd.s General Ledger system Jim (Finance Director) and Phainos (Financial Controller) controls the companys general ledger and they are able to make independent entries in the general ledger. Jim and Phainos are friends and they enjoy doing skating whom they like to attend such events over the winter period.

Primrose (HR Director) is usually given access to make entries to the general ledger and also to make adjustments if they are needed when Jim and Phainos go for the winter skating.

Jim does not require to check other journals that may have been done by Phainos because there is a very much considerable trust between the two of them as they are friends.

At Backlog Ltd, anyone with access to the general ledger can create new general ledger as they may require.

Backlog Ltd Non-Current assets accounting policy

The finance Director, Jim has taken an investigation on the approach that is being taken in relation to non-current assets. He went on to make a comparison with other similar companies of Backlogs size and operations.

Jim then decided to change the following:

1. Smaller items of equipment and fittings of shop will not be capitalised but rather be classified as revenue expenditure.

2. Depreciation for huge items of equipment will be changed.

The above decisions were taken by Jim alone before the travel to go to winter holiday for skating and therefore he instructed Primrose to make adjustments that are appropriate.

Required:

Identify and explain FIVE weaknesses in the general ledger system of Backlog Ltd and evaluate the impact of each and every weakness.