C5 - Effective Accounting Systems

Question 1

Why are effective systems important?

Answer 1

To make sure all business transactions are running smoothly to prevent fraud or errors within the organisation.

Question 2

Requirements for effective systems

Answer 2

• complete - all revenue and expenses are included.
• for business purposes only
• accurate
• right time period

Question 3

What type of control is this?

Checking invoices/credits over a certain amount

Answer 3

Authorisation

Question 4

What type of internal control is this?

Getting more than one person to complete a job. For example someone checking the cash and someone else banking the cash

Answer 4

Segregation

Question 5

What type of internal control is this?

Putting passwords and locks on cupboards

Answer 5

Physical security

Question 6

What type of internal control is this?

Reconciliation of banks, sales ledger and purchase ledger

Answer 6

Arithmetical and accounting

Question 7

What type of internal control is this?

Overseeing other staff members on their jobs and accounting activities

Answer 7

Supervision

Question 8

What type of internal control is this?

Blank purchase order forms are kept secure

Answer 8

Physical controls

Question 9

What type of control is this?

Recognised authority levels for orders above a certain limit

Answer 9

Authorisation

Question 10

What type of control is this?

Invoices are matched with orders and goods received notes

Answer 10

Arithmetical and accounting checks