ACCM4000 Chapter 10 Solutions Tutorial 9 T3 2014
ACCM 4000
Accounting
Principles
Trimester 3, 2014
Tutorial 9 - Solutions
Tutorial 9 Questions:
Week beginning: 26/01/2015
Chapter 10 –
Discussion Questions 1, 2, 6, & 8
Exercises 10.2, 10.3, 10.7, 10.9 & 10.10
Problems 10.7, 10.9
© John Wiley & Sons Australia, Ltd 2012
7.1
Solutions Manual to accompany Accounting 8e by Hoggett et al
CHAPTER 10
CASH MANAGEMENT AND CONTROL
DISCUSSION QUESTIONS
SOLUTIONS
1.
Explain the limitations of balance sheets, income statements and cash flow statements in anticipating future cash flow issues.
From the chapter Scene Setter:
•
•
2.
Balance sheets and income statements are snapshots of your finances at a particular moment. They don’t capture your changing cash requirements through the year.
Even the cash flow statement in your annual accounts is backward-looking, a summary of how your cash balance has changed over the last 12 months.
While it can help you diagnose past problems, it can’t help you anticipate future ones
Many people think of cash as coins and notes. In accounting cash has a broader meaning. What type of assets are defined as cash in accounting?
In accounting the type of assets defined as cash include money, duplicates of credit card and Electronic Funds Transfer at Point of Sale (EFTPOS) sales, and any other negotiable instrument, such as a cheque or postal note, that a bank or financial institution will normally accept as a deposit to an account.
6.
After reading the concepts of a good system of internal control covered in this chapter, the owner of a small business was concerned that his internal control was not good. He counted the daily cash takings and prepared the deposit slip, and banked the takings intact each day.
He also approved payments and signed all cheques. To overcome his problem, he decided he would have to hire more staff, so that he would be able to ensure adequate division of responsibility. Would this solve his problem? Explain.
© John Wiley & Sons Australia, Ltd 2012
7.2
The
Accounting
Principles
Trimester 3, 2014
Tutorial 9 - Solutions
Tutorial 9 Questions:
Week beginning: 26/01/2015
Chapter 10 –
Discussion Questions 1, 2, 6, & 8
Exercises 10.2, 10.3, 10.7, 10.9 & 10.10
Problems 10.7, 10.9
© John Wiley & Sons Australia, Ltd 2012
7.1
Solutions Manual to accompany Accounting 8e by Hoggett et al
CHAPTER 10
CASH MANAGEMENT AND CONTROL
DISCUSSION QUESTIONS
SOLUTIONS
1.
Explain the limitations of balance sheets, income statements and cash flow statements in anticipating future cash flow issues.
From the chapter Scene Setter:
•
•
2.
Balance sheets and income statements are snapshots of your finances at a particular moment. They don’t capture your changing cash requirements through the year.
Even the cash flow statement in your annual accounts is backward-looking, a summary of how your cash balance has changed over the last 12 months.
While it can help you diagnose past problems, it can’t help you anticipate future ones
Many people think of cash as coins and notes. In accounting cash has a broader meaning. What type of assets are defined as cash in accounting?
In accounting the type of assets defined as cash include money, duplicates of credit card and Electronic Funds Transfer at Point of Sale (EFTPOS) sales, and any other negotiable instrument, such as a cheque or postal note, that a bank or financial institution will normally accept as a deposit to an account.
6.
After reading the concepts of a good system of internal control covered in this chapter, the owner of a small business was concerned that his internal control was not good. He counted the daily cash takings and prepared the deposit slip, and banked the takings intact each day.
He also approved payments and signed all cheques. To overcome his problem, he decided he would have to hire more staff, so that he would be able to ensure adequate division of responsibility. Would this solve his problem? Explain.
© John Wiley & Sons Australia, Ltd 2012
7.2
The