Exam 6: Managing and Reporting Working Capital

What are the best ways to prevent both intentional and unintentional losses of cash?

A cash receipt that the business has added to its cash account, but that the bank has not added to the business' account is a:

A simple control over accounts payable is to limit the number of employees authorised to make ____________________.

A ______________ ____________ is a document authorising a supplier to ship the items listed on the document at a specific price.

An examination of the accounting records and the bank statement of Garrison Business revealed the following: Balance in Garrison's cash account \ 50000 Balance according to the bank \ 45000 Outstanding cheques \ 8000 Deposits in transit \ 22500 Bank fees \ 500 Direct deposits to the bank \ 10000 Prepare a bank reconciliation and identify the items that require adjustments to Garrison's records.

The amount of accounts payable that a business owes is listed as a current asset on the balance sheet.

A simple control over accounts receivable is to have potential customers complete a ____________________ prior to letting them charge.

A business prepares a ____________________ to analyse the difference between the ending cash balance in its accounting records and the ending cash balance reported by the bank in the bank statement.

Cash is usually the first asset listed on the balance sheet because it is the most _______________ current asset.

For cash sales, the most important control is the proper use of a ____________________.

Which of the following current assets is most liquid?

____________________ is the merchandise a retail business holds for resale.

To facilitate transactions efficiently all employees should be able to execute a purchase order.

Cost of goods sold is the merchandise a retail business holds for resale.

What is a petty cash fund?

Working capital is a liquidity issue.

Cash is usually the first non-current asset listed on the balance sheet as it is the most liquid.

A basic internal control over cash payments is to make sure payments are only made for approved purchases, supported by proper documentation.

A business' cash includes cheque and credit card invoices, even if they have not yet been deposited.

Credit terms of 2/10, net/30 means a 20% discount if paid in 30 days.