Midterm Exam

1)Would it be okay if your AR Clerk, who handles receipts, also reconciles the bank statement at the end of the month? Why or why not?

2.) The company's environment has two aspects.One is the external environment.Which of the following is not an external environment factor?

a. Economic

b. Technical

c. Social

d. Tone at the Top

3.) Name two methods that are commonly used tospeed up the collection of receivables.

4.) Match the description of the controls with the financial area the control would pertain to. (some matching items may be used more than once)

Question Items

A - All check stock must be locked up when not in use.

B -Review all employee advances with the payroll and payables staff at least once per month.

C - Require approval of bad debt writeoffs.

D - Audit shipment terms.

E - Require approval of bad-debt writeoff.

F-Review Uncashed Checks.

G- Audit the receiving dock.

H - Compare capital investment projections to actual results.

I -Require supervisory approval of all borrowings and repayments.

J - Require approval of credits.

K- Perform a physical inventory of plant equipment every three months.

Matching Items

Answer Items

A.Cash

B.Accounts Receivable

C.Prepaid Expenses

D.Fixed Assets

E.Debt

F.Inventory

5.) The company sells widgets for $3 each.Variable costs are .50 cents per unit. Fixed costs are $100,000.The number of units the company needs to sell to break even is

a. 33,333

b. 40,000

c. 50,000

d. 25,000

6.) SG&A in a medium to large sized company would typically include the costs of all of the following departments except:

a. Accounting Department

b. Legal Department

c. Overhead

d. Marketing Department

7)Name and define two methods of valuing inventory. Name several pros and cons of each.

8.) What is receivables float? What is payables float?

9.) What is the Payback Method? When would the controller use this calculation? Name several advantages and disadvantages of using this method.

10.) Describe at least two roles of the controller you would enjoy if you were the controller of a company. What do you find interesting about these roles? What would be challenging about these roles? What kind of background would you need to perform these roles adequately for a company?