Tag: Accounting

Which ONE of the following controls best mitigates the risk that customers might not be able to pay?

Select ONE answer:

1. Authorisation of credit terms to customers by a senior finance professional
2. Use of a standard template to prepare the invoices
3. Obtaining customers’ signatures on delivery documentation
4. Regular preparation of trade receivables statements

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => Authorisations of credit terms to customers will mitigate risk. The first three options are incorrect because they are procedures that occur after the customer has made the purchase.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following controls best mitigates the risk that customers might not be able to pay?

Select ONE answer:

1. Use of a standard template to prepare the invoices
2. Obtaining customers’ signatures on delivery documentation
3. Regular preparation of trade receivables statements
4. Checking the ageing of the current receivables ledger balance before accepting an order from a customer

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct => Checking the ageing of the current receivables ledger balance before accepting orders to assess the creditworthiness and history of payments will mitigate risk. The first three options are not correct, as they are procedures that take place after the customer has made the purchase.

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following is a risk associated with the sales system?

Select ONE answer:

1. Orders may be taken from customers who are not able to pay
2. Goods may be dispatched but not invoiced
3. The whole credit period offered might not be taken
4. Money might be received at the premises, but not banked

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct – It is not accurate, as it is in the company’s interest for its customers to take the whole credit period and pay sooner. This would pose a risk to the purchasing system, as it would benefit the company to take the entire credit period granted by its suppliers.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following reduces password effectiveness?

Select ONE answer:

1. Frequent changes of passwords
2. Displaying the password on screen
3. Automatic disconnection after failed attempts to access the system
4. Disciplinary offence if passwords are revealed

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct => Displaying the password on screen would reduce password effectiveness. The existence of frequent changes of passwords, automatic disconnection after failed attempts and disciplinary offences if passwords are revealed would all increase password effectiveness.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following reduces password effectiveness?

Select ONE answer:

1. User selection of passwords
2. Frequent changes of passwords
3. Automatic disconnection after failed attempts to access the system
4. Disciplinary offence if passwords are revealed

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct => User selection of passwords would reduce password effectiveness. The existence of frequent changes of passwords, automatic disconnection after failed attempts and disciplinary offences if passwords are revealed would all increase password effectiveness.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.