Professional Documents
Culture Documents
INTRODUCTION
The Abul Pascual Store is a sole proprietorship type of business owned by Mrs.
Poblacion West 3, Aliaga, Nueva Ecija. The business sells all kinds of groceries. It is a well-
known store in the municipality of Aliaga. Most of the residents are regular customers of the
store. The grocery store gained customer satisfaction through the years of quality service.
Before it expanded into a bigger location, it started in a small stall in Aliaga Public Market in
March 11, 1988. The store existed in the market from 1988 up to 2010. Mr. and Mrs. Pascual
managed the store through the years until it expanded and moved out to a bigger place in
Through the years of existence, the store operated using manual recording of daily
transaction. The ordering of goods are done through phone calls to different supplier. The
supplier who can offer the lowest bid will be chosen. The purchasing and receiving of goods
are done by the owner’s daughter, Cherry Ladd Pascual. The goods are delivered directly to
the business’ warehouse. The employees of the business receive SSS benefits after 1 year of
employment. Every employee works 11 hours per day, which starts at 7 am to 6 pm. The
store closes during lunch break. The salary distribution of employees are done on a weekly
basis. Salary advances are not allowed because it triggers employee tardiness.
During the past operations of the business, they encountered several theft incidents
done by outsiders and shoplifters. CCTVs are installed in the store but they are not
functioning well. There are incidents that customers deceive the cashier of the cash that they
tendered. But despite of all these experiences, the store remained in existence because of
good customer relationship. The owner emphasizes that customer relationship is very
important to maintain in the line of business. The business owner is planning to have a
program for loyal customers. They are allowed to have on credit purchase with no interest.
CORAZON A. PASCUAL
Owner
Saleslady Bagger
Saleslady Bagger
Saleslady
Organizational Chart (Proposed)
OWNER
CASHIER PURCHASING
AGENT
SALES LADIES
RECEIVING
AGENT
BAGGERS
WAREHOUSE
BAGGAGE COUNTER CUSTODIAN
CLERK
CHAPTER II
Threats
The store does not actually have a system that monitors their daily sales.
Thus, every time they file tax returns, they only use a rough estimate. It becomes a
threat to the business because they will not know if they are deriving income or
from the separate funds of the owners. In this case, the store doesn’t have the policy
of depositing the money intact. Whenever the owner has to pay something, the money
will directly come from the receipts of the store. If this transaction will not be
When it comes to the custody of documents and access to money, the store
has closed supervision. But when it comes to the custody of inventory, supervision is
not properly maintained. The warehouse custodian is also the bagger. The tendency
is, there might be unauthorized person that will enter the warehouse (e.g. delivery
statements which reflects the end product of the annual operations. Because of this,
the business cannot compare their yearly operations. They can’t keep an eye whether
their sales are improving or not and if the benefits of the business exceed the cost or
The store employs First in First out (FIFO) method in selling their
inventories. However, this system is not properly applied. Whenever there is delivery
of new goods, the old stocks are getting piled up and sooner or later, expires.
Moreover, the store doesn’t employ physical count. They only use rough estimate
The store has recorded issues of theft inside and outside the store. There was
a time that the store was robbed and some materials and inventories were destroyed
inside. Furthermore, there are also some buyers who do shoplifting and some
have big impact and may result to a great loss of the business.
Safeguards
For the business to properly monitor their sales, it is important to have a copy or
duplicate of receipts. Currently, they are using a cash register but the system does not
leave them a record of transactions. For this matter, the store might want to consider a
carbon copy duplicate of receipt or they may adopt a system that will account their
sales weekly. In that way, every cash inflow will be recorded. They will know if the
actual receipts of cash and the record did tally. Hence, the business will determine
their earnings for the week and can eliminate or reduce the theft in the counter if ever
there is.
For the business to employ the entity concept, the owner may decide to deposit their
weekly income intact in the bank so that it will not be used on personal purposes (i.e.
personal expenditures). In that way, the income of the business will be separated from
personal use. The entity concept will help the business to identify the level of their
income.
For the business to have a proper segregation of duties especially in the warehouse,
the personnel must not have a dual work for him to properly monitor every inventory
that is entering the warehouse. It is also important to maintain the closed supervision
For the business to have financial statements, it is important for them to at least
employ an accountant that will prepare financial statements for their annual
operations. This will help them to maintain comparability on their yearly sales. In
addition to that, paying of taxes might be reduced if they will have a proper
accounting system. For example, when they properly match their input and output
For the business to have a strong inventory control, the store has to strictly implement
the First in First out (FIFO) method. The implementation of this method boils down
to the warehouseman because he has the control over the inventory that will be
moved out from the warehouse to the store. In addition to that, it is important to
perform a physical count at least once a year to check the level of the inventories on
hand.
For the business to have a strong security and to avoid the issue of theft, it will be
helpful if they will have a baggage counter and assign an employee to supervise the
baggage. They must also have a closed circuit television (CCTV) inside the store and