Larry has been appointed as the new manager of KEC Limited. As a new member of...

 

Transcribed Image Text:

Larry has been appointed as the new manager of KEC Limited. As a new member of the company, he has introduced some new policies to improve the performance of the company. (i) To improve the efficiency of the accounting department, checks must be prepared, signed and sent out immediately to the other party once the invoices have been received. (ii) In order to make best use of the staff and reduce travelling time, he arranges his staff to deposit cash into the bank once a week. (iii) He changes the company from using periodic inventory system to perpetual inventory system because by keeping a perpetual inventory system the company can always provide correct information and thus avoid the need of taking a physical count of the inventory on hand. (iv) He suggests preparing the bank reconciliation once a year instead of once a month so that most of the timing differences events that happened during that year will be settled. (v) He thinks that the straight-line depreciation method applied to the existing assets has been used too long and it is time for a change. He suggests to use the double-declining-balance method because it can give people a feeling of a big improvement in management. Required: Comment on the recommendations made by Larry in improving the performance of the company. Larry has been appointed as the new manager of KEC Limited. As a new member of the company, he has introduced some new policies to improve the performance of the company. (i) To improve the efficiency of the accounting department, checks must be prepared, signed and sent out immediately to the other party once the invoices have been received. (ii) In order to make best use of the staff and reduce travelling time, he arranges his staff to deposit cash into the bank once a week. (iii) He changes the company from using periodic inventory system to perpetual inventory system because by keeping a perpetual inventory system the company can always provide correct information and thus avoid the need of taking a physical count of the inventory on hand. (iv) He suggests preparing the bank reconciliation once a year instead of once a month so that most of the timing differences events that happened during that year will be settled. (v) He thinks that the straight-line depreciation method applied to the existing assets has been used too long and it is time for a change. He suggests to use the double-declining-balance method because it can give people a feeling of a big improvement in management. Required: Comment on the recommendations made by Larry in improving the performance of the company.

Answer rating: 100% (QA)

1 The recommendation to prepare sign and send out checks immediately upon receipt of invoices will i... View the full answer