Cash Management and Internal Controls Quiz
Test your knowledge on treasury management, cash flow, and internal controls with these 12 questions. Learn key concepts in cash management.
#1
Which of the following is a primary objective of cash management?
Maximizing revenue
Minimizing expenses
Minimizing idle cash
Maximizing shareholder value
#2
Which internal control principle ensures that only authorized individuals can access cash?
Segregation of duties
Physical safeguards
Restricted access
Independent verification
#3
Which of the following is a cash inflow for a company?
Payment of accounts payable
Purchase of inventory on credit
Sale of goods for cash
Depreciation expense
#4
What is the purpose of a petty cash fund?
To pay for large capital expenditures
To provide employees with bonuses
To cover small, incidental expenses without having to write a check
To finance long-term investments
#5
Which cash management technique involves delaying payments to conserve cash?
Lockbox system
Zero-balance account
Cash pooling
Stretching payables
#6
Which of the following is NOT a component of the cash conversion cycle?
Inventory conversion period
Accounts payable period
Accounts receivable period
Fixed asset turnover period
#7
Which of the following is an example of a compensating control in cash management?
Cash flow forecasting
Segregation of duties
Requiring dual signatures for large disbursements
Bank reconciliation
#8
What is the purpose of a cash budget?
To track actual cash inflows and outflows
To monitor changes in market interest rates
To evaluate the company's liquidity position
To forecast future cash flows and requirements
#9
In cash management, what does the term 'float' refer to?
The time it takes for a check to clear
The difference between book balance and bank balance
The amount of cash held by a company
The interest earned on excess cash balances
#10
In cash management, what is the purpose of a bank reconciliation?
To identify discrepancies between bank records and company records
To forecast future cash flows
To evaluate investment opportunities
To determine creditworthiness of customers
#11
Which internal control measure aims to prevent and detect fraud in cash handling processes?
Dual custody of cash
Routine internal audits
Segregation of duties
Electronic fund transfers
#12
Which of the following is a characteristic of a strong internal control environment for cash management?
Loose monitoring of cash transactions
Frequent changes in accounting personnel
Regular reconciliation of bank accounts
Dependence on a single individual for cash handling
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