Exam 11: Cash Management and Control

Sugar Industries makes all sales on credit with 60% of the payment received in the month of sale, 20% in the month following the sale, 15% in the 2^nd month following sale, and the remaining 5% remains uncollected. Budgeted sales are: July $100 000 August $140 000 September $120 000 October $150 000 The budgeted receipts from debtors for September are:

How many of the following are features of good internal control of cash receipts? $\bullet$ Employees who handle cash from customers do not prepare the daily banking. $\bullet$ Use of a safe for temporary cash storage $\bullet$ Pre-numbering of sales dockets and receipts $\bullet$ Use of cash registers and EFTPOS to record cash sales

The cash short and over ledger account, which records the difference between the total of the cash register tape and the actual cash counted from the register:

Which of the following is not necessarily one of the benefits of effective internal control?

The preparation of a cash budget ensures that:

Which of the following is a principle of good cash management?

Which of the following statements concerning internal control is true?

The procedures adopted by a business to safeguard its assets, promote the reliability of accounting data and encourage compliance with management policies are:

When preparing a bank reconciliation what would cause the bank statement balance to be less than the adjusted cash balance in the general ledger? (Assume the bank is not in overdraft.)

Which of the following is not a principle of internal control?

Bowen Ltd received its monthly bank statement showing a balance of $35 894 Cr at 31 March. On this date cash received from debtors and not yet deposited at the bank totalled $8971 and outstanding cheques were $3465. The amount to appear as cash at bank on the 31 March balance sheet is:

Which of the following is a broad principle of cash management that helps ensure that a business remains solvent?

Which of the following is a limitation of internal control? I The accounting standards II The cost of the controls III The possibility of collusion between two or more employees

Which of the following is not a feature of good internal control?

The ratio that measures solvency by relating cash flows from operating activities to current liabilities is the:

When preparing the bank reconciliation James found that the bank had incorrectly debited the business' bank account with $200. The proper procedure is to:

The petty cash fund should be reimbursed at the time the financial statements are prepared so that:

Ignoring GST, what is the correct accounting entry that would need to be made for a customer's cheque for $2800 that has been dishonoured?

Which of the following is not a characteristic of good internal control?

While preparing the bank reconciliation Terry discovered that the bank had incorrectly paid cheque number 100389 for $900 more than the amount written on the cheque by the company. The bank account has a positive balance. The proper procedure to correct this bank error is to: