Answers

9 Accounts and financial services

Answers to Test yourself questions
9.1, page 137
Q1a Credit control means monitoring the amount of money
outstanding to the organisation on accounts and taking action
to make sure these are paid.
b It is important because businesses need money from their sales
to make a profit. Also, they need to receive payments promptly
so that they can pay their own bills and staff salaries.
9.2, page 139
Q1 A statement of account is sent to a customer to summarise all of
the transactions that have taken place that month, for example,
invoices sent and payments received, and to inform the customer
of the sum of money now due.
9.3, page 143
Q1 STATEMENT OF ACCOUNT
Novelty Sales Company
16 Town Street
Port of Spain
TRINIDAD
Tel: 932 8541 Email: accounts@novelties.com.tt
Fax: 932 5814 Website: www.novelties.com.tt

To: Bits and Pieces

20 Country Road
Port of Spain Date: 30 April 2012
TRINIDAD
Date Details Debit ($) Credit ($) Balance ($)
1 April Balance owing 2825.52
6 April Invoice 10032 350.50 3176.02
16 April Cheque 2000.00 1176.02
17 April Invoice 10045 280.25 1456.27
25 April Credit note 172 70.00 1386.27
AMOUNT DUE 1386.27

9.4, page 145

Q1 Any 3 of: Calculators – used to do business calculations
quickly and easily, many have a print-out facility, which is
ideal as calculations can be checked more easily; adding
machines – similar to a calculator but less commonly used as

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Unit 9 Ans.indd 39 01/12/11 11:14 AM

 Answers

they do not have the sophisticated calculation abilities that

calculators do; computers – used to record and store accounts
information using an accounting package and/or to carry out
calculations using a spreadsheet package; printers – used to
print out accounts information and worksheets created on
computer; scanners – used to capture a digital image of a
printed document, such as a statement of account, that can be
saved as a computer file and/or sent electronically to someone
else; copiers – used to produce multiple copies of a financial
document.

9.5, page 147

Q1 Advantages: It is a quick way of settling a debt; the recipient
knows that payment has definitely been made. Disadvantages,
any 2 of: Without a receipt, payment would be difficult to prove;
cash needs to be stored and transported securely, especially if it
is a large amount; there may be money laundering restrictions to
prevent the acceptance of large cash amounts if the payment is
being made by an unknown person.

9.6, page 149

Q1 Direct debit is an electronic transfer system whereby a bank
account holder agrees that an organisation can withdraw
regular amounts from their account. The organisation must
notify the holder if the amounts change. Standing order also
means that a regular payment is automatically made to an
organisation, but this time it has been set up by the account
holder with their bank and can only be changed or stopped by
the account holder. The payee is the person receiving a cheque
and, therefore, receiving payments. The drawer is the person
making out the cheque and, therefore, ‘drawing’ money out of
their account. Deposits are monies paid into a bank account,
including cash and cheques.

9.7, page 151

Q1 Any 4 of: Issue vouchers; check that vouchers and receipts
match each other; check that vouchers for multiple amounts are
added up correctly; check that vouchers have been authorised;
complete the cash disbursement sheet; calculate the amount
required to restore the imprest. Security is important because
cash can easily be stolen. The tin must be lockable and must be
locked away securely when not in use.

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Unit 9 Ans.indd 40 01/12/11 11:14 AM

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Practice exam questions

SECTION 1: Multiple-choice questions
1 d; 2 a; 3 c; 4 d; 5 b; 6 b; 7 d; 8 b; 9 a; 10 c.

SECTION 2: Short answer questions

1 Any 3 of: Name; works number; period; tax code; NI number;
basic pay; overtime; gross pay; deductions (including different
types); net pay.
2 Any 2 of: Refuse to supply further goods; insist on immediate
payment; eventually take legal action.
3 Any 2 of: Check that all financial documents are filed and easily
accessible; check that all financial records are up to date; check
that all documents have been completed correctly.
4 A bank statement is received from the bank whereas a
statement of account is received from a supplier. A bank
statement itemises all deposits into the account and all
expenditure from the account whereas a statement of account
itemises all invoices sent and payments received within the
month.
5 Any 3 of: Preparing the payroll; credit control; collection of
accounts; dealing with debit and credit notes; preparing for
audit; knowing different types of bank accounts.
6 Any 2 of: It is lost in the post; it is delayed in the post; the
customer is away when it is delivered; the customer has not yet
banked it; the bank has not yet processed it.
7 A credit card enables the holder to buy something and pay for
it at a later date. This is interest free if paid by the date stated
on the next statement, otherwise interest is charged. A debit
card enables the holder to make a purchase but the money is
taken from their bank account immediately.
8 The accounts office will issue a credit note for the value of
the damaged goods. This will be listed on the statement of
account so the customer will not be expected to pay for the
items.
9 Any 3 of: Current accounts; loans; insurance; electronic
banking; investments; credit cards. This answer is not definitive
and other appropriate suggestions may be acceptable.
10 $103.50.

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Unit 9 Ans.indd 41 01/12/11 11:14 AM

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Case study
1 Any 2 of: Staff can record accounts information quickly and
easily; information can be entered on sales and purchases;
month-end reports can be produced at a key stroke.
2 Francelle will produce the payroll and individual payslips. The
payroll provides a list of all employees with each person’s gross
pay, all deductions and their net pay. This is the organisation’s
record of pay for that period. Individual payslips are the
employee’s record of what they earned in gross pay, what was
deducted and the amount of their take-home pay.
3 Any 2 of: Jordan monitors when payment is due. He contacts
customers to remind them of overdue payments. He contacts
them again if no payment is received. Eventually he may start
legal action to recover the money due.
4 Amount spent was: $148.85. This is the amount required to
restore the imprest. Note: the disbursement sheet should also be
drawn up accurately and all information entered in the correct
columns as shown below.

Received Voucher Total Postage and Office

Date Details Travel
$ no. payment $ stationery sundries
200.00 (today) Cash received
(today) Taxi fare 251 20.00 20.00
(today) Milk and sugar 252 6.50 6.50
(today) Registered letter fee 253 15.00 15.00
(today) Display card and 254 19.35 19.35
marker pen
(today) Parcel postage 255 18.60 18.60
(today) Taxi fare 256 32.00 32.00
(today) Display folders 257 22.40 22.40
(today) Magazines for 258 15.00 15.00
reception

TOTAL 148.85 52.00 75.35 21.50

(today) Balance c/f -51.15
51.15 (today) Balance b/f
148.85 (today) Cash received

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Unit 9 Ans.indd 42 01/12/11 11:14 AM

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5 The corrected cash book balance is $1200.50. The reconciliation

statement should be drawn up and completed accurately as
shown below.

SUNSHINE TOURS LTD

Bank Reconciliation Statement
Date: (today)

Closing balance – Bank Statement $1035.00

Add item(s) not credited: Cheque from Island Retail +$600.00
Electronic transfer from Caribbean Trading +$200.00
Bank interest $15.00

Subtotal $1850.50

Less Cheque not presented: Cheque for Brockley Fabrics −$250.00

Cheque for Palm Accessories –$400.00

Corrected cash book balance $1200.50

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Unit 9 Ans.indd 43 01/12/11 11:14 AM