Internal Controls
Which Control? Businesses hire qualified staff who are able to do their jobs.
Reliable, Competent Personnel
What are the five over-arching accounting categories?
Assets, Liabilities, Owner's Equity, Revenue, Expenses
Which ratio is calculated as Net Credit Sales / Av. Accounts Receivable?
Turnover of Accounts Receivable Ratio
Which Control? Physical assets require controls which safeguard them.
Physical Controls and Security
What is Clash Royale Arena 12 called?
Spooky Town (apparently)
Which Control? Different staff should perform interrelated tasks to avoid fraud or errors.
Separation of Duties
Which control? Employees should have clear roles, and actions should be traceable to a relevant person.
Responsibility
Which ratio is calculated as COGS / Av. Inventories?
Turnover of Inventories Ratio
Which Control? Documents should be consecutively numbered, easy to use, and prepared ASAP.
Adequate and Accurate Documents and Records
What song has the fastest section ever sung on Broadway?
Guns and Ships (Hamilton)
Which control? A manager or director should be responsible for approving certain actions or access rights.
Authorisation
Which Financial Statement shows Assets, Liabilities, and Owner's Equity at a certain point in time?
The Statement of Financial Position
Which ratio is calculated as Net Profit / Revenue
Net Profit Ratio
Which control? Records should be checked against independent documents to ensure accuracy.
Verification
When is a Financial Year in Australia?
1st July to 30th June
Requiring staff to login with a personalised username, an organisational chart, and assigning assets via an asset register are examples of which internal control category?
Responsibility
Explain limited and unlimited liability businesses
Limited liability - your liability is only to the extent that you invested in the business (ie. loss of shares investment).
Unlimited liability - you are personally responsible for all business debts (ie. may need to sell personal home to pay business debts).
What two liquidity ratios have we discussed in this unit?
Turnover of Accounts Receivable and Turnover of Inventories.
Maintaining clear j*b descriptions, training registers, and induction checklists are all examples of which internal control category?
Reliable, Competent Personnel
How many minutes are there in a year?
525,600 minutes
The ordering of goods/inventories is dependent on which three factors?
The reorder point, the reorder quantity, and the lead time.
Explain the relationship between gross profit and net profit.
Gross profit is the profit earned on the sale of goods less COGS alone - this gross amount must be high enough for the business to pay all other expenses, with the balance becoming net profit. A low gross profit will almost always lead to a low (or negative) net profit.
What three profitability ratios have we discussed in this unit?
Net Profit Ratio, Gross Profit Ratio, Return on Owner’s Equity Ratio.
List three considerations which should be specified in a company’s Credit Policy.
Credit worthiness, number of days for payment, on-time discount options, late payment fees
When is my (Miss Georgia) birthday?
11 September