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module_6_formative_assignment-1.docBUSINESS MANAGEMENT TRAINING COLLEGE
S O U T H AF R I C A ’S MO S T P R E S T I G I O U S DI S T A N C E E D U C A T I O N BU S I N E S S CO L L E G E
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2014 First Edition - First Print February 2014
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DIPLOMA IN BUSINESS MANAGEMENT 1ST YEAR
DIPLOMA IN HUMAN RESOURCES MANAGEMENT 1ST YEAR
MODULE 6: FINANCIAL MANGAGEMENT
FORMATIVE ASSIGNMENT
ASSIGNMENT NO: MAN661-0-2
Learner Instructions and Guidelines
1. Remember to keep a copy of your answers.
2. All answers must be in black OR in blue pen, do not use pencil.
3. DO NOT leave out any questions! Please contact your study advisor if you do not understand a question.
4. Make sure to indicate the assignment number on the front of your assignment cover.
5. The suggested time to complete a module is 3 months.
6. NB!! Due to the fact that evidence provided has to be current, this assignment is ONLY
valid for 6 months from the date of receipt. If you take longer than 6 months to complete this assignment and module, please contact the College to get the latest assignment for this module.
7. Please check that you received the correct assignment before you start with the assignment. The assignment number and module number is indicated on the first page. BMT College takes no responsibility for students who complete incorrect assignments.
If you received an incorrect assignment contact the college so that this can be rectified.
Question 1: Answer the following short questions regarding financial management
1.1 The primary financial objective of any business is to:
(1)
1.2 Name 5 secondary objectives of financial management.
(5)
1.3. Explain 5 steps that can be taken to ensure that a business maintains a positive cash flow.
(5)
1.4 Name 4 reasons why budgets are drawn up.
(4)
Total question1 /15
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Question 2: Basic financial concepts: Match the following terms (a-j) to the most accurate description (2.1 – 2.10) a) Solvency b) Fixed assets c) Liquidity d) Working capital e) Assets f) Profitability g) Fixed overhead expenses h) Capital i) Variable expenses j) Current assets |
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2.1 |
Stock of raw materials, stock of finished goods, work in progress, prepaid expenses and deposits, cash on hand and at bank and outstanding debtors. |
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2.2 |
Items that are purchased to facilitate the running of the business (they are not pur- chased for resale) |
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2.3 |
The ability of a business to pay off its debt at any given time, even if all its activities should stop. |
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2.4 |
The relationship between the net income earned over a certain period, and the capital used in that period to generate income. |
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2.5 |
The money available to the business for the purchase of goods and services with a view to generating an income for the business. |
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2.6 |
The economic resources that an enterprise owns |
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2.7 |
Expenses that must be paid whether the business is trading or not. |
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2.8 |
The company’s ability to keep making all its required payments regularly and on time. |
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2.9 |
Money used to acquire current assets such as stock or financing debtors. |
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2.10 |
Expenditure directly related to the manufacturing or sales processes of a company |
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Total question 2 |
/10 |
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Question 3: Carefully read each of the following statements and state whether they are true (T) or false (F): |
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No |
Statement |
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3.1 |
The amount of an expense account is decreased by entries on the debit side. |
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3.2 |
The amount of an income account is increased by entries on the debit side. |
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3.3 |
An enforceable claim against others, such as account receivable is classified as an asset. |
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3.4 |
The acid test measures the ability of an organisation to meet its current liabilities without the most non-liquid item of current assets. |
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3.5 |
Solvency ratios investigate the effectiveness of employment of assets to realise sales |
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Total question 3 |
/5 |
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Question 4: Classify (√) the following accounts as asset, liability, income or expense accounts: |
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ACCOUNT |
ASSET |
LIABILITY |
INCOME |
EXPENSE |
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Sales |
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Loan from bank |
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Telephone |
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Rental paid |
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Discounts given |
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Stationary in store |
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Postage |
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Equipment |
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Total question 4 |
/4 |
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Question 5: Choose the concept (a-f) that match the statements (5.1-5.6): a. Fixed asset register b. Journals c. Income statements d. Cash flow statements e. Ledgers f. Balance sheets |
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5.1 |
Diaries of the day-to-day transactions of the business. |
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5.2 |
Summarise and categorise the information entered into journals. |
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5.3 |
Reflect the profit/loss made by company for a specific period. |
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5.4 |
Examples of ledgers. |
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5.5 |
Project the flow of money in a business for specified future period. |
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5.6 |
Snapshots of businesses at close of business on a specified day. |
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Total question 5 |
/6 |
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Question 6: Compile a pre-adjustment trail balance for Catherine’s Cake Emporium. The following balances appear in her general ledger on 31 July: Bank (favourable) R 3 000 Capital R 20 000 Salaries R 8 000 Vehicles R 35 000 Creditors R 32 000 Debtors R 3 000 Sales R 7 000 |
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Account |
Debit |
Credit |
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Total question 6 /10 |
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Total Formative 6 /50 |
