CASE STUDY 1 – RBS BOOKSTORE a. Identify 5 key transactions conducted by the bookstore. 1. 2. 3. 4. 5. Raising of funds through short-term bank loans. Lease agreement for the building occupied by the bookstore. Purchase of inventory from suppliers. Textbook returns by customers. Merchandise sold in cash. b. Identify 5 different users of the bookstore’s accounting information system, excluding the managers and employees. 1. Bookstore Owner 2. Suppliers 3. Banks or other Financial Institutions 4. Government 5. Customers c. Identify 5 reports that might be useful for the bookstore’s owner and managers; state the use of the report. Name of Report: Statement of Financial Performance (Income Statement) Used for: The income statement shows the results of an entity's operations and financial activities for the reporting period. It usually shows prior periods for comparison purposes. It is used to assess the profitability of a company. It shows the company’s revenue and expenses. Name of Report: Statement of Financial Position (Balance Sheet) Used for: The balance sheet shows the company’s assets, liabilities, and shareholders’ equity at the report date. It shows what the company owns and what the company owes at a point in time. It is useful in determining the liquidity of the business or if the company has sufficient assets to pay off current obligations. It also used to determine the debt-toequity ratio which finds out the company’s financial leverage as to whether it is financing through debt or its funds. Name of Report: Statement of Cash Flows Used for: The cash flow statement shows the sources and uses of cash for a certain period of time. It informs investors and creditors about the solvency the company, where the company is receiving its cash from, and on what it is spending its cash. Name of Report: Inventory Performance Report Used for: Inventory performance reports shows which inventory is selling well or not. It specifies the company’s best-selling or worst-selling product. It shows which product has growth over the year or which declined. This will help the company make adjustments or improvements to its supply chain. In the case of the bookstore, this can be done by genres as well as by authors. Name of Report: Purchase Order Summary Report Used for: Purchase order summary report helps track the inventory coming in. It is used to show insights to the company’s purchase activity. With this report, the company could plan the storage space, avoid over stocking, avoid sold-outs, and get ready for the purchase fulfillment.