Assume you are going to set up a merchandise company’s accounting system that has both credit and cash customers:

Assume you are going to set up a merchandise company’s accounting system that has both credit and cash customers:      

  1. Explain the basic details of your company that might impact the set-up of an accounting system (i.e. size, type of products, etc.). Also, explain the accounting procedures you would utilize for accounts receivable, accounts payable and inventory. (Assume you are utilizing an accrual accounting system for all of your transactions.)    
  2. Provide a chart of accounts that would be utilized for your company. (This might change as the project proceeds to parts’ 2 and 3.)    
  3. What special journals and subsidiary journals would you include within your accounting system? Why?    
  4. What source documents would be utilized in your accounting system and what information would you want on these documents? (E.g. purchase invoices checks, etc.)    
  5. Would you use a computerized or manual system? Why? What are the benefits and costs of using one system vs. another?   

The merchandise company is a small shop that sells cloth diapers. I need help answering these questions regarding that specific shop.

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