Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Bank Reconciliation

Financial Accounting

6. Internal Controls and Reporting Cash

Bank Reconciliation

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Multiple Choice

Which of the following is a common mistake made when managing current cash needs?

Recording all transactions immediately and accurately

Failing to reconcile the bank statement regularly

Separating duties for cash handling and record-keeping

Maintaining a cash budget and monitoring cash flows

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Verified step by step guidance

Understand the concept of managing current cash needs: This involves ensuring that a business has enough liquidity to meet its short-term obligations while avoiding inefficiencies or errors in cash management.

Review the options provided in the problem: Each option represents a practice related to cash management. Analyze each one to determine whether it is a mistake or a best practice.

Option 1: 'Recording all transactions immediately and accurately' - This is a best practice in cash management as it ensures accurate financial records and prevents errors.

Option 3: 'Separating duties for cash handling and record-keeping' - This is another best practice that helps prevent fraud and errors by implementing internal controls.

Option 4: 'Maintaining a cash budget and monitoring cash flows' - This is a critical best practice for effective cash management, as it helps businesses plan for future cash needs and avoid liquidity issues. The correct answer is Option 2: 'Failing to reconcile the bank statement regularly,' which is a common mistake that can lead to undetected errors or fraud.