5.3 Establishing Financial Control Systems

Question 1

Why is it important for businesses to record keep?

Answer 1

It will help a business owner understand where the business is at, and will display accurate records to investors who are more likely to invest into a business with accurate records.

Question 2

What are 3 record keeping strategies used by businesses?

Answer 2

Businesses can employ a book keeper, keep records simple and easy to read or innovate a bookkeeping software to keep records in an orderly and easy to access form.

Question 3

Define auditing

Answer 3

Is a process used to test a businesses accounting processes. Auditing can be performed internally by an employee or externally by a professional.

Question 4

Why is it important for businesses to manage cash-flow?

Answer 4

This is because it allows them to pay for day to day expenses.

Question 5

How can a business manage cash-flow?

Answer 5

They can do this by keeping track of money owed, hiring accountants or by offering discounts to customers who pay cash.

Question 6

Define award

Answer 6

An award is a legal document that outlines the minimum pay rates and conditions of employment. Currently there is 122 awards that cover most people in Australia.

Question 7

Define financial control systems

Answer 7

Are the processes that allow a business to accurately monitor, manage and report financial performance.