Omega Inc Manufactures Several Types of Widgets and Sells Them

question 29

Essay

Omega Inc manufactures several types of widgets and sells them directly to consumers.One type of widget contains a design defect that creates a risk of injury.Briefly explain the steps that the company should take by way of risk management.Identify the sorts of additional facts that would be required for the purpose of effective risk management.

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Definitions:

General Journal

An accounting ledger that records all types of transactions before they are transferred to specific accounts in the general ledger.

Gross Method

An accounting practice for recording purchases with a discount, where the purchase is initially recorded at gross amount with the potential discount noted separately.

Sales Discounts

A reduction in the price of goods or services offered to a customer, intended to encourage prompt payment or increase sales.

Adjusting Entry

An accounting entry made into a company's general ledger at the end of an accounting period to record any unrecognized income or expenses for the period.