Exam 10: Cash Management and Control

Which of these is not a good internal control practice?

How many of these are features of good internal control of cash payments? Separation of record-keeping and the authority to sign cheques The use of a business bank account allowing all major payments to be made by cheque or electronic transfer Preparing regular bank reconciliation statements The use of a petty cash fund to cover small incidental cash payments

Which of these is not a principle of internal control?

If the petty cash fund was not reimbursed at the time the financial statements were prepared:

The correct order in which the steps in the bank reconciliation process occur is: i. Tick off the items in the prior reconciliation with the bank statement ii. Prepare the bank reconciliation iii. Tick off the cash journals with the bank statement iv. Update the cash journals with unticked items from the bank statement

Which of these is a principle of good cash management?

Mojo Ltd received its monthly bank statement showing a balance of $27 629 Cr at 31 January. On this date cash received from ratepayers and not yet deposited at the bank totalled $4321 and outstanding cheques were $857. The amount to appear as cash at bank on the 31 January balance sheet is:

Fletcher and Associates had an unadjusted bank account ledger balance at 31 May of $750 Dr. The bank statement at the same date showed a balance of $1090 Cr. Bank service charges for the month were $20 and outstanding cheques totalled $400. The bank statement revealed that the bank had collected dividends for the firm of $120 and a deposit of $150 is not yet recorded on the statement. What is the corrected bank account ledger balance at 31 May?

Bendigo Resources makes all sales on credit with 40% of the payment received in the month of sale, 40% in the month following the sale and the remaining 20% in the subsequent month. Budgeted sales are as follows: January $100 000 February $140 000 March $120 000 The budgeted receipts from debtors during March are:

Internal controls that apply to computerised accounting systems include which of the following? I Programming controls II Passwords III Back ups IV Computer viruses

The asset most commonly subject to misappropriation is:

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 statements relating to a cash budget is true?

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

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

Mechanical and electronic controls should be used, where possible, to protect assets and improve the accuracy of the accounting process. An example of such a device is: I A burglar alarm Ii A virus scanner Iii Electronic funds transfer Iv Insurance

When reconciling the ledger with the bank statement (assuming a positive bank balance) a returned (dishonoured) cheque should be:

Kathryn's account is not in overdraft. When preparing the bank reconciliation she found that the bank had incorrectly debited her account with $120. The proper procedure is to:

Malaysian Carpets makes all sales on credit, with 60% of the payment received in the month of sale and 40% in the month following sale. Budgeted sales are February $100 000 March $120 000 What is the estimated amount received from debtors in March?