This is a Financial Accounting course question.

Question no 1

Your acquaintance, Vic Velakturi, owns a store that sells households daily usage products. Velakturi acquires her goods from a few select vendors. She generally makes purchase orders by on account. Sales are primarily for cash. Velakturi use a general journal and a general ledger for her record keeping. At the end of each business day, she records one summary entry for cash sales. Velakturi recently began offering items for corporates and offices. This has increased sales substantially, and she is now receiving orders from corporate and other clients who order large quantities and prefer to buy on account. As a result of increased credit transactions in both purchases and sales, keeping the accounting records has become extremely time-consuming. Velakturi wants to continue to maintain her own recording system and calls you for advice. Required: Advise her what she would do to overcome this problem by explaining pros and cons of yours proposed and her recording system.