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Cash control

Topic 1:
You own an automobile parts company and have been approached by a leading car manufacturer to supply parts to the company. How would you determine that the car manufacturer has a good record of servicing sales and paying its suppliers? What are the signs you would look out for in the financial statements for the possibility of bad debts? What are the advantages and disadvantages of allowing customers to make purchases on credit? Give reasons for your answers.

Topic 2:
You are a business consultant providing information and advice to future small business owners. Controls are especially important with respect to cash. Three of them are clear assignment of responsibility, specific procedures for documentation, and independent internal verification of the data. Create a PowerPoint presentation for a seminar aimed at future business owners who will be dealing with large amounts of cash. Explain the importance of the three areas of cash control and make recommendations for procedures that could be implemented.

Solution Preview

Topic 1:
You own an automobile parts company and have been approached by a leading car manufacturer to supply parts to the company. How to determine that a car manufacturer has a good record of servicing sales and paying its suppliers.

I would suggest that the automobile parts company utilize a national certification body that enables the company to check the quality of potential supplier. The most respected one to use would be the International ...

Solution Summary

This solution discusses the advantages and disadvantages of making purchases on credit and validation of data.

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