Vale, Ic Sherenne S.

AEC 8 Financial Management

BSAIS Mr. Rudy Talavera

FINALS
HOMEWORK No. 1
Bank Reconciliation

1. Explain the three kinds of bank deposits.

 Demand deposit - is money deposited into a bank account with funds that can be
withdrawn on-demand at any time. This deposit is noninterest-bearing.
 Saving deposit - is an interest-bearing deposit account held at a bank or other
financial institution. Through passbook, they can make upon initial deposit and
withdrawals.
 Time deposit - is an interest-bearing bank account with a fixed term such as
Certificate of Deposit. It may be withdrawn on demand or after a certain period of
time agreed upon.
2. What is bank reconciliation?
is the process by which the bank account balance in an entity’s books of account
is reconciled to the balance reported by the financial institution in the most recent bank
statement. It is usually prepared monthly because the bank provides the depositor with
the bank statement at the end of every month.
3. What is a bank statement?
is an official summary of financial transactions occurring within a given period
for each bank account held by a person or business with a financial institution. It’s an
exact copy of the depositor’s ledger in the records of the bank.
4. What are credit memos? Give examples of credit memos.
It refers to items not representing deposits credited by the bank to the account of
the depositor but not yet recorded by the depositor as cash receipts.
Some examples:
o Proceeds of bank loan credited to the account of the depositor.
o Matured time deposits transferred by the bank to the current account of the
depositor.
5. What are debit memos? Give examples of debit memos.
It refers to items not representing checks paid by the bank which are charged or
debited by the bank to the account of the depositor but not yet recorded by the depositor
as cash disbursement. Some examples:
o Technically defective checks
o Bank service charges
o Reduction of loan
6. What are deposits in transit? Outstanding checks?
Deposits in transit are collections already recorded by the depositor as cash
receipts but not yet reflected on the bank statement. While Outstanding checks are checks
already recorded by the depositor as cash disbursement but not yet reflected on the bank
statement.
7. Define a certified check. What is the treatment of certified checks for bank reconciliation
purposes?
A certified check is one where the bank has stamped on its face the word
‘accepted’ indicating sufficiency of the fund. The treatment of certified checks for bank
reconciliation purposes is certified checks should be deducted from the total outstanding
checks.
8. Explain the three forms of bank reconciliation.
 Adjusted balance method – The book balance and the bank balance are brought
to a correct cash balance that must appear on the balance sheet.
 Book to bank method – The book balance is reconciled with the bank balance or
the book balance is adjusted to equal the bank balance.
 Bank to book method – The bank balance is reconciled with the book balance or
the bank balance is adjusted to equal the book balance.
9. What is proof of cash?
It’s an expanded reconciliation in that it includes proof of receipts and
disbursements. This may be useful in discovering possible discrepancies in handling cash
particularly when cash receipts have been recorded but have not been deposited.
10. Solve Problem nos. 10-1 up to 10-15.
10-1. A 10-6. A 10-11. C
10-2. D 10-7. B 10-12. A
10-3. C 10-8. C 10-13. B
10-4. A 10-9. A 10-14. C
 10-5. A 10-10. C 10-15. D
Vale, Ic Sherenne S. AEC 8 Financial Management
BSAIS Mr. Rudy Talavera

FINALS
HOMEWORK No. 2
Statement of Cash Flows

1. What is a statement of cash flows?

It provides information about the cash receipts and cash payments of an entity. This
financial statement explains and summarizes the amount of cash and cash equivalents’ inflow
and outflow of the company or the movements of cash for a year or annually. It’s presented
based on the three major activities of the business which are operating, investing, and financing.
2. Explain the primary purpose of a statement of cash flows.
Its main purpose is to provide relevant information about cash inflows and outflows of an
entity during the period. It also enhances the comparability of operating performance by different
entities. And it’s also purpose is the determination of the cash balance of the entity at some
specific period of time. When we say the cash balance, it contains the details of only the cash
movements of the organization.
3. Define cash.
Cash is money on hand or cash in a bank, it can be coins or currency and we use it as an
exchange for goods and services that we need. In a business transaction, money is the medium
standard of exchange and its legal tender.
4. Define cash equivalents.
Cash equivalent is short-term investment securities with assets, it’s extremely liquid with
temporarily idle cash and easily convertible into a known cash amount. Some examples are
treasury bills, treasury notes, commercial paper, etc.
5. Give examples of cash equivalents.
 Three-month BSP Treasury bill
 Three-year BSP Treasury bill purchased three months before the date of maturity.
 Three-month time deposit
 Three-month money market instrument or commercial paper.
6. May equity securities qualify as cash equivalents? Explain.
Since shares do not have a maturity date, equity securities cannot qualify as cash
equivalents. However, preference shares with a specified redemption date and acquired three
months before the redemption date can qualify as cash equivalents.
7. What are the three classifications of cash flows?
 Operating
 Investing
 Financing
8. Explain operating activities.
Operating activities are primarily derived from the main revenue-producing activities of
the business. It also generally results from transactions and other events that enter into the
determination of net income or loss.
9. Explain investing and financing activities.
Investing activities are cash flow derived from cash transactions related to the purchase
or sale of non-current assets and other long-term investments, such as PPE or Plant, Property,
and Equipment. While Financing activities report cash transactions related to changes in equity
and borrowings, it’s also meant to pay back the loan. These activities include transactions that
involve debt, equity, dividends, etc.
10. Solve Problem nos. 1 up to 12.
1. A 7. A
2. C 8. A
3. A 9. D
4. A 10. C
5. 11. C
6. D 12. B

Study well and Goodluck Future CPAs

Vale, Ic Sherenne S. AEC 9 IT Application Tools
BSAIS Mr. Rudy Talavera

FINAL TERM
HOMEWORK No. 1

Chap.28
Fundamentals of Management Information System

1. Distinguish between data and information.

The plural of datum is data, which refers to an unprocessed fact or figure from which a judgment
can be derived. We have information when data is collected and transformed into meaningful
communication. Information, on the other hand, is processed data that is relevant and helpful to users.

2. Explain the objective of MIS and benefits derived therefrom.

The primary objective of the Management Information System is to provide accurate, timely, and
meaningful data for management planning, analysis, control, and decision making to optimize the
performance of the organization. Some advantage of it is better integration-producing activities leads to
information that is more complete, and relevant. Managers are able to search, probe and find answers to
non-recurring questions, and decisions are made more timely due to prompt availability of information.

3. Give the characteristics of an effective MIS.

 Relevance – Ability to define and support necessary action by appropriate persons.

 Flexibility – adaptable to changing conditions and needs.
 Economy – benefits equal exceed costs.
 Accuracy – Ratio of correct information to the total amount of information produces over a
period of time.
 Completeness – provides all the relevant information needed to make a decision.
 Timeliness – response interval does not impair the opportunity to take action.
4. Enumerate the activities involved in the development of a firm's MIS.

 Define the main and secondary goals and their priorities.

 Identify those factors that are critical to the success of each goal.
 Design a system’s structure to achieve the desired goals and priorities.
 Implement the system.
  Monitor and control the system.
5. Define Management Information System
It is defined as the process of providing information to decision-makers in order for them to make
and implement the appropriate decisions to maximize the interrelationships of available resources in order
to achieve the organization's objectives as effectively as possible.

Chapter 32
Information System Audit

1. How can inadequate controls in a computer system lead to incorrect decision-making?

Because uncontrolled use of computers can have a widespread impact on society, and also
inaccurate information could cause wrong decisions or erroneous choices, and fraud.

2. Why is there a need for control and audit of the computer system.?
Because it might lead to misallocation of resources due to decisions based on incorrect data, and
also the consequences and costs when data is lost. Computer abuse or fraud might also encounter in a
computer system.
3. What are the implications of a company losing its:
a. Personnel master file?
Personnel is always a valuable resource particularly in light of an ongoing scarcity of
well-trained computer professionals in many countries. Intentional or unintentional loss of data
can cause disruption and multimillion peso investments.
b. Inventory master file?
If the software is destroyed, operations will be disrupted and any confidential information
could be disclosed to competitors. If the software is a proprietary package, lost revenues and
lawsuits could arise due to the loss of confidential files.

4. Why are control still needed to protect hardware, software, and personnel, even though
substantial insurance coverage might have been taken out by an organization?
Because it’s still not enough. Like all assets, they must be protected by a system of internal
control, since hardware can be damaged maliciously, software and important data files can be stolen, and
supplies can be used for unauthorized purposes.

5. What are the major assets in an information system facility.

 Hardware
 Software
 Facilities
 People
 Data files
 System documentation
 Supplies
6. Define data integrity.
In information system auditing, data integrity is a basic notion. It's a state wherein data is
assumed to have particular qualities including completeness, soundness, purity, and truthfulness or
veracity.
7. What factors affect the importance of data integrity to an organization?
 The value of the informational content of the data item for individual decision-makers.
 The extent to which the data item is shared among decision-makers
 The value of the data item to competitors

Study well. Goodluck Future CPAs