Accounts Payable
Inventory
General 1
General 2
100
Name a source document you would use when dealing with accounts payable?
Tax invoice, adjustment note and statement of account.
100
Why is it important to have suitable storage conditions for inventories?
So that the inventories cannot be lost or damaged through theft or natural causes.
100
What are the 2 practices of internal accounting controls?
Sound accounting practices and auditing.
100
What TERM would you call an independent review of a business's accounting practices and procedures in order to decide whether the financial records represent a true and fair statement of the activities.
This is called an AUDIT
200
Why is it important to take advantage of discounts when paying your accounts payable invoices?
By ensuring you pay during the discounted periods can lead to substantial savings during the course of a year.
200
Give me an example of how large department stores provide security over their inventories. Think of the opening walkways leading into the shops.
1) A staff member may be based at the front of the shop checking bags of both customers and staff. 2) Security devices sound an alarm if a product with a bar-coded tag leaves the shop without beng recorded through checkout. 3) Cameras are positioned in multiple areas. 4) Undercover shopping detectives may be employed.
200
What are the 5 practices of internal administration controls
Division of duties, rotation of duties, physical controls, personnel policies and integrity controls.
200
An outline of the following can be found in a WHAT policy? * Maximum credit limits * Terms of payment * terms of interest * Collection procedures
Credit Policy
300
Is it wise to have to same person who completes your General Ledger be responsible for completing your Subsidiary Ledger?
NO, you should implement Divison of Duties as an internal control.
300
Would it be fair to say that "just-in-time purchasing" means having the right goods in the right place at the right time?
Yes
300
A customer's payment history is changing. They used to be on time but now their payments are sporadic and less than the required amounts. 1) Would this effect their creditworthiness? 2) What would you do about it?
Yes it would effect their creditworthiness. You would contact the customer and discuss any issues they may be having with their cash flow and, if neccessary, work out a payment plan.
300
Each month WHAT is is prepared and sent out that details each transaction involving each accounts receivable?
A statement of account.
400
What should be required when any cheque is issued by a business in payment of an account?
Authorisation
400
A reorder point is established when a business considers at what level should an inventory fall to so that the business has enough time to order and receive the goods. This amount of time is called WHAT?
Lead time.
400
What is the best way to pay for small items such as staffroom milk, coffee, stamps, etc. You would use this when the items are so small that a writing a cheque would be considered unneccessary.
Petty Cash. The petty cash is usually kept in a lockable container and consists of small amounts of money that is distributed for small items and must be replaced with receipts. The funds are reimbursed up to several stages within a month and always accounted for at end-of-period reports.
400
Explain what an "aged analysis of account receivable" is.
An aged analysis of accounts receivable is a list of accounts receivable balances classified according to the time period the debt has been outstanding.
500
An example of an internal control in managing your accounts receivable is to reconcile (balance) the Accounts Receivable Control a/c with the Schedule of Accounts Receivable. What would be an example of an internal control when managing your accounts payables?
To reconcile (balance) the Accounts Payable Control a/c with the Schedule of Accounts Payable.
500
What are the 3 areas that inventory management controls can be divided into?
1) Control over storage 2) Control over purchasing/selling of inventories 3) Security over inventories
500
When you don't get paid and you are considering outsourcing someone to chase your debts, what things should you consider when making the decision to outsource or not outsource?
What is the cost of my staff chasing up debts? What is the fee to use an agent? Is it really worth it? It might cost you more to chase the debt than what the debt is worth.
500
A business will perform a WHAT to ensure that a business cash at bank account matches with the bank's statements.
Bank Reconciliation
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