Cash and Internal Controls

State the type of cash that is kept in the cash register or a safe.

Discount allowed

• is a cash discount

• is a trade discount

• is given to credit customers

• is given to the business by credit customers

• is an expense

The instructions written or printed on the cheque is meant for the ____________. (which party?)

Which of the following are reasons that a cheque is dishonoured by the bank?

• The cheque has expired or is post-dated.

• Information on the cheque is not consistent or not complete.

• The payer's bank account does not have sufficient money.

• All of the above

Which of the following journal entries represent the transaction of a cheque received from the credit customer being dishonoured by the bank, and the discount allowed given was withdrawn?

• Dr Cash at bank

  Dr Discount allowed

  Cr Trade receivables

• Dr Trade receivables

  Cr Cash at bank

  Cr Discount allowed

Interpret the entry on 9 January 2020.

Which of the following describes the transaction on 9 January?

• Credit supplier, Melly, refunded $210 cash to the business.

• The business paid $210 in cash to credit supplier, Melly.

Interpret the entry on 16 January 2020.

Which of the following describes the transaction on 16 January 2020?

• Bought $380 of goods and paid in cash.

• Sold $380 of goods and received cash.

• Bought $380 of goods and paid by cheque.

The purpose of internal control is to _____________ the assets of the business.

Internal controls are also procedures established to ensure that business transactions are recorded a_____________.

Which of the following are internal control measures?

• Segregation of duties and custody of cash

• Segregation of duties, authorisation and bank reconciliation

• Segregation of duties, custody of cash and bank reconciliation

• Segregation of duties, custody of cash, authorisation and bank reconciliation