International Association of Accessibility Professionals (IAAP) Certified Administrative Professional (CAP) Practice Exam

What is typically tracked in a cash account?

1. Inventory levels

2. Funds available, including expenses and revenue.

3. Employee salaries

4. Accounts payable

The correct answer is: Funds available, including expenses and revenue.

A cash account is primarily used to track the funds available to an organization, including both the expenses incurred and the revenue received. This financial record provides a clear overview of the cash flow, allowing an organization to understand how much money is currently on hand for operations and expenditures. Tracking funds available enables businesses to manage their liquidity effectively, ensuring they have enough cash to meet upcoming financial obligations, such as bills or operational costs. Monitoring both expenses and revenue within this account helps in budgeting and forecasting, as it allows administrators to see their financial position at any given moment. In contrast to the correct answer, options like inventory levels, employee salaries, and accounts payable do not fall under the typical scope of a cash account. While inventory levels reflect asset management, employee salaries are a part of operating expenses that are recorded separately in payroll accounts rather than in cash accounts. Accounts payable, which indicates money owed to suppliers, tracks liabilities rather than the available cash. Thus, the focus on tracking funds available, including both revenue and expenses, is what distinctly characterizes the cash account.