Chapter 8 - Cash

Role of accounting (Refer to Textbook Pg 7-11)

Accounting is an information system that provides accounting information for stakeholders to make __________ decisions.

Role of accountant (Refer to Textbook Pg 7-11)

Accountants prepare and provide ________ information for decision-making.

Professional ethics (Refer to Textbook Pg 7-11)

An accountant with ​ ​ ​ (a)   is ​ (b)   and ​ (c)   in all professional relationships. An account who is ​ (d)   will not let bias. ​ (e)   or undue influence of others override his/her professional judgement.

• integrity
• straightforward
• honest
• objective
• conflict of interest

Match the following stakeholders and the type of decisions that they will need to make. (Refer to Textbook Pg 7-11)

• Whether to buy from the business

• Suppliers

• Whether to continue to invest or sell the business

• Customers

• Whether to continuing working at the business

• Employees

• Whether to sell to the business on credit

• Owners and shareholders

• Whether the business complies with the tax regulations

• Government

Stakeholders rely on both​ (a)   and non-accounting information that are not shown on ​ (b)   for decision-making. Non-accounting information refers to ​ (c)   factors that may reflect current or future ​ (d)   and ​ (e)   of a business but are not captured by the accounting information.

(Refer to Textbook Pg 7-11)

• accounting
• financial statements
• qualitative
• trends
• fundamentals

Which of the following is NOT a reason for dishonoured cheque?

• Cheque has expired

• Cheque is post-dated

• Information on cheque is not consistent

• Payer's bank account does not have enough money

• None of the above

Which of the following is NOT a purpose of internal control?

• To safeguard business' assets

• To ensure business transactions are recorded accurately

• To perform bank reconciliation

• To comply with laws and regulations

The need for internal control over cash (Refer to textbook chapter 8)

As cash is highly ​ (a)   it has a high chance of getting ​ (b)   ​ . A business should implement internal controls to reduce the possibility of (c)   or the ​ (d)   in order to ensure that cash is well-protected and ​ (e)   reported.

• portable,
• stolen
• theft
• likelihood of error
• accurately

Match the following internal controls to its correct description.

• Obtain proper approvals for all payments from authorised personnel

• Authorisation

• Secure cash and cheques in a locked storage

• Custody of cash

• Compare the business' cash at bank record with the bank statement to identify missing items

• Bank reconciliation

• Making sure cash handling and cash recording duties are not done by the same employee

• Segregation of duties

Refer to textbook chapter 8 (pg 134)

Direct deposits are amounts ​ (a)   deposited or ​ (b)   directly into the business' ​ (c)   account through a ​ (d)   .

• customers
• transferred
• bank
• credit transfer