Question

1. 1. Which of the following is not a means of strengthening cash controls?

   1. Preparing regular bank reconciliations
   2. Maintaining a cash over/short account
   3. Controlling petty cash
   4. Month end close process

   2. If starting with the cash balance of a company's general ledger, which of the following adjustments would not be included when completing a bank reconcilation?

   1. Add or subtract errors made in the accounting records
   2. Subtract bank service charges
   3. Add deposits in transit
   4. Add interest revenue
2. 1. An operating cycle may be as short as a few days.
   2. An operating cycle is important in measuring income.
   3. An operating cycle can be managed to increase net income.
   4. An operating cycle has no impact on the amount of capital needed.

   3. The operating cycle is important in measuring

   1. Assets
   2. Liabilities
   3. Income
   4. Stocks

Answer 1

1.Cash Control means managing and monitoring credit and collection policies, cashallocation, and disbursement policies, accounts payable policies and the invoicing cycle.Cash is the most important liquid asset of the business.

Answer: Month end close process

2.A bank reconciliation is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate.

Answer:Add or subtract errors made in the accounting records

3.The operating cycle (Cash Cycle) of a company is an activity ratio measuringthe average period of time required for turning the company's inventories into cash.

Answer: Stocks