Subject: Financial Management TRUE OR FALSE. If the statement is INCORRECT, explain why the statement is INCORRECT. 1. Company policies related to cash are guidelines by which the staff should be guided and protected against misuse of cash of the company. 2. The cash reported in the Balance Sheet should not be restricted. 3. Under CIF, the seller agrees to pay in lump sum or installment, the cost of the goods, insurance and freight charges. 4. Perpetual inventory system is a system where the company maintains a stock card that shows the running balance of the stock at any time. 5. The approved purchased orders are normally issued to the seller.

Q: Which is false concerning use of special journals? Select one: a. Purchase of any items on account…

A: Cash disbursement journal contains the record of all payments made for incurring any cash…

Q: Which one of the following statements is true if a company's collection period for accounts…

A: Collection period of accounts receivable means the time gap between selling of goods on credit and…

Q: The estimated cash receipts include total receipts from sales on account, interest revenue less…

A: Cash flows can be defined as the cash receipts and cash payments of a business from its operating,…

Q: When does the business maintain Petty cash? a. Shortage of cash in business b. Business purchased on…

A: The petty cash book is prepared for the daily expenses of the business.

Q: Explain two methods that an organization could use to monitor its balances of : Cash Accounts…

A: Current assets - These are those assets that the company owns and expects to convert into cash…

Q: Cash paid for inventory is an operating activity. True or False True False

A: Cash flow from operating activities indicates the cash inflow or outflow transactions related to the…

Q: With regard restricted cash, all the following statement are correct except OA It is a cash set…

A: 1. Restricted Cash is is the cash held for some specific purpose. It is an asset for the company but…

Q: Money orders are considered cash. True False

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: * ?Which one of the following is correct The term 'Sales' include the sales of fixed assets for cash…

A: Sales means the amount recorded in books as revenue earned by selling the goods or services. Account…

Q: Evaluating internal control over cash payments Gary’s Great Cars purchases high-performance auto…

A: Internal control: Internal control is a process which ensures continuous reliability of…

Q: Cougar Company credited cash for a prepayment. They did this because: a. Cash payment (or an…

A: A prepaid expense seems to be a sort of asset on the balance sheet that emerges from a company…

Q: The distinction between operating and nonoperating income relates to: Primary activities of the…

A: Operating Income: The term "operating income" refers to the money that remains after all operational…

Q: Which of the following is not used by a company to manage cash receipts efficiently? A-…

A: The company requires cash for the long-term and short-term requirements. Efficient cash management…

Q: With good internal controls, the person who handles cash can also Account for cash payments.…

A: Good internal controls are the policies which help in providing true and fair representation of the…

Q: Preparing bank reconciliation statement is: Select one: a. Not necessary when a perpetual inventory…

A: Internal control system of an entity is a set of measures that are compiled with a view to prevent…

Q: Which of the following is used in computing cash received from customers using the direct method?…

A: Statement of cash flows: It is a financial statement that shows the increase or decrease in the cash…

Q: Which of the following is correct? Cash disbursement function is for the accounts payable. Cash…

A: Cash disbursement: It refers to the outflow of cash paid in exchange for the provision of goods or…

Q: The operating cycle is best described as the time between a.the formation of the company and the…

A: The amount of time a corporation spends between spending money on operational activities and…

Q: If a company uses accrual-basis accounting O transactions are recorded in the period they occur…

A: The cash basis of accounting works on the method that only cash-related transactions are recorded,…

Q: he ___________ is the process by which a company spends cash, generates revenues, and receives cash…

A: Solution Concept In a business there may be various activities conducted Every business has its core…

Q: $1: Underlying accounting data includes journal entries, general ledgers, and confirmation replies.…

A: The answer is C - Only two statements are correct.

Q: ch of the following is used in computing cash payments for merchandise using the direct method?…

A: Merchandise refers to the variant types of commodities or goods that are being produced and sold by…

Q: Which of the following is correct regarding cash basis of accounting? a. Sales include cash sales…

A: Under cash accounting, the incomes and expenses are recognised when they are received or paid and…

Q: The Conceptual Framework can override requirements in a Standard.      True False

A: “Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: able. b. What steps should be taken by a business to reduce/eliminate excessive inventory? Explain…

A: A cash on delivery (COD) transaction occurs when the recipient pays for an item in cash rather than…

Q: which statement is true about the operating cycle a. the time needed from acquiring inventory from…

A: The operating cycle is the average period of time or days required for a business to make an initial…

Q: which of the following account will be least likely involved in the purhasing sub-process of the…

A: The journal entries are prepared to keep the record of day to day transactions of the business.  The…

Q: Assume a company has a $350 credit (not cash) sale. How would the transaction appear if thebusiness…

A: As per accrual concept of accounting, all incomes and expenses of the particular period should be…

Q: TRUE OR FALSE. If the statement is INCORRECT, explain why the statement is INCORRECT. 1. Company…

A: Analysis of the given options:: 1. Company policies related to cash are guidelines by which the…

Q: From page 4-3 of the VLN, which statement is true regarding cash sales? O We always recognize the…

A: Cash refers to the monetary value and resource that is important for the company to operate. It is…

Q: The statement of cash flo ws answers such questions as "Where does a company spend Its cash?" and…

A: Statement of Cash Flow - It is the statement that includes operating, Investing and Financing…

Q: What does the phrase "Revenue is recognized at the point of sale" mean? (Assume the company reports…

A: Accrual Basis of Accounting: The accrual basis of accounting is a method of accounting where the…

Q: Assume a company prepares the statement of cash flows using the indirect method. The company…

A: The cash flow statement is helpful for the stakeholders that they can identify the organization's…

Q: All of the following statements are true EXCEPT: O a. Ideally, a company should measure receivables…

A: Receivables are those accounts or customers to whom business has made sale of goods or services and…

Q: Which of the following account will be least likely involved in the purchasing sub-process of the…

A: The purchasing sub-process of the purchasing and disbursement cycle starts with authorization of…

Q: According to money measurement concept, which of the following will not be recorded in the books of…

A: According to Money Measurement Concept, Accounting records should only include those transactions…

Q: he company sells a 2/10, n/30 basis. Internet control quite weak, so the senior accountant in charge…

A: solution : concept of 2/10 n/30               the credit term 2/10 , n/30 means if the payment is…

Q: financial statement assertion

A: Financial statement assertion is the claim like statement made by management regarding the…

Q: Which of these transactions would not be part of the cash flows from the operating activities…

A: Cash flows from operating activities include all the activities relating to the daily operations of…

Q: Which of the following is not an example of a cash outflow?   Select one: a. Purchase of…

A: Cash outflow: It can be defined as the disbursement or payment in cash for meeting the expenditures…

Q: ich of the following account will be least likely involved in the purchasing sub-process of the…

A: Solution: Purchasing and disbursement cycle is the cycle in which purchasing needs of a business are…

Q: Which of the following is the amount of revenue reported on the income statement of a retail…

A: Income statement is the financial statement of an entity. It is prepared to compute the gross profit…

Q: Statement of Cash , select the false statement a.The cash received from the sale of goods is a cash…

A: A statement of cash shows the different sources of cash (i.e. cash inflows) and the different uses…

Operating Cash Flows

A cash flow statement (CFS) helps the company to know the amount of cash at its disposal, the activities that lead to earning cash, and the activities which require cash expenditure for a particular period. The statement represents the liquidity of the company.