Question 1

Regardless of the inventory method used, periodic or perpetual, a business should always perform a ____________________ of inventory.

Accepted Answer

physical count

Question 2

Adopting first in first out (FIFO) or specific identification method of inventory calculation will not impact cost of goods sold and ending inventory balances.

Accepted Answer

A) True 
 B)False  False

Question 3

What simple controls should be established over accounts receivable?

Accepted Answer

Before extending credit, a business should determine that a customer is likely to pay. This means that a credit check should be done. The amount of credit extended should be based on the customer's income, amounts of other debt, etc. A business should monitor the accounts receivable balances of its customers. The business must have an accounting system that allows the business to track each customer's credit activity. It also needs an organised collection effort. The business should monitor its total accounts receivable balance. The business should investigate why its accounts receivable balance is increasing or decreasing.

Question 4

____________________ are the amounts owed to a business by customers from previous credit sales

Accepted Answer

The answer of ____________________ are the amounts owed to a...

Question 5

One physical control over inventory is to restrict ____________________ to it.

Accepted Answer

The answer of One physical control over inventory is to...

Question 6

Which of the following is NOT one of the reasons cash is the asset most likely to be stolen from a business?

Accepted Answer

A)  It has no recorded identification marks. 
B)  It is difficult to prove that it has been stolen. 
C)  It is difficult to prove who stole it. 
D)  It is the most valuable asset for a business. 
A)  It has no recorded identification marks. 
B)  It is difficult to prove that it has been stolen. 
C)  It is difficult to prove who stole it. 
D)  It is the most valuable asset for a business.

Question 7

Working capital management is only important when a business has a relatively large amount of capital.

Accepted Answer

A) True 
 B)False

Question 8

One advantage of credit sales is that having accounts receivable does not require significant management effort.

Accepted Answer

A) True 
 B)False

Question 9

For cash sales, the most important cash procedure is the proper use of a cash register.

Accepted Answer

A) True 
 B)False

Question 10

A business is reconciling its bank accounts. Indicate whether each of the following items would be added to (+), subtracted from (-), or have no effect on (0) the business' cash balance and the bank balance in determining the reconciled cash balance.
 $$\begin{array} { | l | c | c | } 
\hline & \begin{array} { c } 
\text { Business } \
\text { Cash Balance }
\end{array} & \begin{array} { c } 
\text { Bank } \
\text { Balance }
\end{array} \
\hline \text { Deposits in transit } & & \
\hline \text { Charges made directly by the bank } & & \
\hline \text { The business' over-recording of a cheque that it wrote } & & \
\hline \text { Outstanding cheques } & & \
\hline \text { Deposits made directly by the bank } & & \
\hline \text { The bank's over-recording of a deposit } & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | c | c | } 
\hlin

Question 11

Which of the following pieces of information would you not expect a potential credit customer to provide in a credit application form?

Accepted Answer

A)  the name of their spouse and their personal bank account details. 
B)  the name of their bank. 
C)  a list of assets. 
D)  a list of other debts. 
A)  the name of their spouse and their personal bank account details. 
B)  the name of their bank. 
C)  a list of assets. 
D)  a list of other debts.

Question 12

Accounts receivable can provide a greater increase in profit if credit sales are monitored properly.

Accepted Answer

A) True 
 B)False

Question 13

The cost of goods sold would appear on the income statement while the cost of the ending inventory would appear on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 14

The most likely asset to be stolen in a business is cash.

Accepted Answer

A) True 
 B)False

Question 15

____________________ is calculated by subtracting current liabilities from current assets.

Accepted Answer

The answer of ____________________ is calculated by subtracting current liabilities...

Question 16

The basic rule for good internal control over cash payments is to have all payments ____________________ before they are made.

Accepted Answer

The answer of The basic rule for good internal control...

Question 17

The total amount of accounts receivable less the expected amount of uncollectible accounts is called the net realisable value.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is NOT a method for calculating the dollar value for inventory?

Accepted Answer

A)  First in first out (FIFO). 
B)  Weighted average. 
C)  Specific identification. 
D)  Cost of goods sold. 
A)  First in first out (FIFO). 
B)  Weighted average. 
C)  Specific identification. 
D)  Cost of goods sold.

Question 19

Working capital management is a balancing act between having enough liquidity versus having so much excess cash that profitability is reduced.

Accepted Answer

A) True 
 B)False

Question 20

Describe six inventory controls.

Accepted Answer

The answer of Describe six inventory controls....

Regardless of the inventory method used, periodic or perpetual, a business should always perform a ____________________ of inventory.

Adopting first in first out (FIFO) or specific identification method of inventory calculation will not impact cost of goods sold and ending inventory balances.

What simple controls should be established over accounts receivable?

____________________ are the amounts owed to a business by customers from previous credit sales

One physical control over inventory is to restrict ____________________ to it.

Which of the following is NOT one of the reasons cash is the asset most likely to be stolen from a business?

Working capital management is only important when a business has a relatively large amount of capital.

One advantage of credit sales is that having accounts receivable does not require significant management effort.

For cash sales, the most important cash procedure is the proper use of a cash register.

Which of the following pieces of information would you not expect a potential credit customer to provide in a credit application form?

Accounts receivable can provide a greater increase in profit if credit sales are monitored properly.

The cost of goods sold would appear on the income statement while the cost of the ending inventory would appear on the balance sheet.

The most likely asset to be stolen in a business is cash.

____________________ is calculated by subtracting current liabilities from current assets.

The basic rule for good internal control over cash payments is to have all payments ____________________ before they are made.

The total amount of accounts receivable less the expected amount of uncollectible accounts is called the net realisable value.

Which of the following is NOT a method for calculating the dollar value for inventory?

Working capital management is a balancing act between having enough liquidity versus having so much excess cash that profitability is reduced.

Describe six inventory controls.

Introduction to Business Accounting and the Role of Professional Skills

Developing a Business Plan: Cost-Volume-Profit Analysis

Developing a Business Plan: Budgeting

The Accounting System: Concepts and Applications

Recording, Storing and Reporting Accounting Information

The Income Statement: Content and Use

The Balance Sheet: Content, Use and Analysis

The Cash Flow Statement: Content and Use

Sustainable Business

Short-Term Planning Decisions

Capital Expenditure Decisions

Filters

Exam 6: Managing and Reporting Working Capital

Regardless of the inventory method used, periodic or perpetual, a business should always perform a ____________________ of inventory.

Adopting first in first out (FIFO) or specific identification method of inventory calculation will not impact cost of goods sold and ending inventory balances.

What simple controls should be established over accounts receivable?

____________________ are the amounts owed to a business by customers from previous credit sales

One physical control over inventory is to restrict ____________________ to it.

Which of the following is NOT one of the reasons cash is the asset most likely to be stolen from a business?

Working capital management is only important when a business has a relatively large amount of capital.

One advantage of credit sales is that having accounts receivable does not require significant management effort.

For cash sales, the most important cash procedure is the proper use of a cash register.

Which of the following pieces of information would you not expect a potential credit customer to provide in a credit application form?

Accounts receivable can provide a greater increase in profit if credit sales are monitored properly.

The cost of goods sold would appear on the income statement while the cost of the ending inventory would appear on the balance sheet.

The most likely asset to be stolen in a business is cash.

____________________ is calculated by subtracting current liabilities from current assets.

The basic rule for good internal control over cash payments is to have all payments ____________________ before they are made.

The total amount of accounts receivable less the expected amount of uncollectible accounts is called the net realisable value.

Which of the following is NOT a method for calculating the dollar value for inventory?

Working capital management is a balancing act between having enough liquidity versus having so much excess cash that profitability is reduced.

Describe six inventory controls.

Introduction to Business Accounting and the Role of Professional Skills

Developing a Business Plan: Cost-Volume-Profit Analysis

Developing a Business Plan: Budgeting

The Accounting System: Concepts and Applications

Recording, Storing and Reporting Accounting Information

The Income Statement: Content and Use

The Balance Sheet: Content, Use and Analysis

The Cash Flow Statement: Content and Use

Sustainable Business

Short-Term Planning Decisions

Capital Expenditure Decisions

Filters