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ACCA Applied Knowledge · Business and Technology · Accounting and finance functions within business organisations

Which of the following is a typical role of the financial management function within a business?

Deciding the mix of debt and equity finance and evaluating investment proposals is a core financial management role. It concerns raising and using funds to maximise value. Maintaining the ledger is financial accounting, and checking compliance with controls is carried out by internal audit.

  1. ADeciding on the appropriate mix of debt and equity finance and evaluating investment proposalsCorrect
  2. BMaintaining the general ledger and posting journal entries
  3. CChecking that employees comply with internal control procedures and reporting weaknesses

Explanation

Financial management covers raising finance, the capital structure decision and appraising investments. Maintaining the ledger is financial accounting, while testing compliance with controls and reporting weaknesses is the role of internal audit.

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