Question

1. Even when a computer software system is used for management of the practice’s finances, discuss why following the bookkeeping guidelines for a manual system still has merit.

2. Identify precautions for accepting the types of payments: cash, check, credit card, and debit card.   

Answer 1

1. Bookkeeping guidelines for a bussiness for a manual system has the following merits.

i. Establishing a manual system is less expensive.

ii. Correction of entries is easier with manual records on spot as compared to software records that can leave complicated audit trails.

iii. The risk of corrupted data is much less. Using a software accounting system, many times there is a chance of data being corrupted, and you will not be able to access the information any longer, which is not a problem with manual records.

iv. Less risk of data loss , no need of any electricity to check credentials.

v. Duplicate copies of the records are generally avoided.

vi. If you are not familiar with how accounting software calculates and treats your information, with manual records it's easier for you to keep records.

vii. Manual records are always available when you need them.

2. Precautions accepting following types of payments -

i. Cash -

• ensure payment by cash is mentioned

• check whether the currency notes are in proper condition and not torn or have any defect.

• check for fake notes.

• Always count cash in front of the costumer.

• Since it's a pandemic going on , you should also apply correct measure of hand sensitization after handling cash.

ii. Cheque -

• look for all parts of the cheque

•check for the security features of a cheque

• use cheque verification service

•check for all dates and signature properly

•ask for all the costumers contact information

• ask for costumer ID proof

• check for any spelling mistakes

iii. Debit card -

• check for name and signature on the debit card

• check for expiry date validity

• check for the documents and ID proof of the customer

• do an online authorisation and verification of the credit card

• keep record of the card if required.

• After the payment is done ensure that the amount is credited to the account.

iv. Credit card -

• Check for the credit card issuing company
Match the name and signature on the credit card as provided in the documents.

• Check for expiry date ,validity and limit of the credit card.

• do an online authorization and verification of the credit card.

• keep record of the card if required.

• after the payment is done ensure that the amount is credited to your account.