HM1030 – Accounting

HM1030 – Accounting

Question 1:

How does the use of bank accounts ensure control of cash? 8 points

Directions to complete Question 1:

• TIP 1: Consider using an introductory paragraph explaining:

a. What is an internal control measure?

b. What is the importance of an internal control measure?

c. How is a bank account considered an internal control measure?

• TIP 2: See page 240 in your Principles of Financial Accounting textbook > Basic Bank Services: Bank Accounts, Bank Deposits and checking contributes to the Control of Cash.

• TIP 3: See Chapter 8 Highlights – Banking activities as controls

• Use short responses, in complete sentences with proper grammar and spelling

• Your answer should be no less than 8 sentences.

Question 2:

How does the use of bank accounts improve management’s decision making? 8 points

Directions to complete Question 2:

• TIP 1: Think about your experiences with Banking. What does it help you to do?

• Use short responses, in complete sentences with proper grammar and spelling

• Your answer should be no less than 8 sentences.

Question 3:

How does the bank reconciliation reduce the likelihood of theft and fraud? 8 points

Directions to complete Question 3:

• TIP 1: See page 243: non-sufficient funds, errors

• Use short responses, in complete sentences with proper grammar and spelling

• Your answer should be no less than 8 sentences.

Question 4:

Maxtel had net sales of $4,235 million and ending accounts receivable of $775 million. Its days’ sales uncollected equals

Question 5:

A company borrowed $10,000 by signing a 180 ? day promissory note at 11%. The total interest due on the maturity is?

Question 6:

A company had net sales of $600,000, total sales of $750,000 and an average accounts receivable of $75,000. Its accounts receivable turnover equals. HM1030 – Accounting

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