TAILIEUCHUNG - Lecture Financial accounting: Information for decisions (7/e): Chapter 6 - John J. Wild

Chapter 6 - Reporting and analyzing cash and internal controls. In this chapter, you will learn: Define internal control and identify its purpose and principles, define cash and cash equivalents and explain how to report them, apply internal control to cash receipts and disbursements, compute the days’ sales uncollected ratio and use it to assess liquidity,. | Financial Accounting John J. Wild Seventh Edition Copyright © 2015 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter 6 Reporting and Analyzing Cash and Internal Controls The Sarbanes-Oxley Act The Sarbanes-Oxley Act, also known as SOX, requires management and auditors of publicly held companies to adhere to or perform specific requirements, such as: Evaluation of internal controls. Auditor’s work is overseen by the Public Company Accounting Oversight Board (PCAOB). Restriction on consulting services performed by auditors. Term limits on person leading the audit. Harsh penalties for violators, including prison time with severe fines. C1 6- Principles of Internal Control Establish responsibilities. Maintain adequate records. Insure assets and bond key employees. Separate recordkeeping from custody of assets. Divide responsibility for related transactions. Apply technological controls. Perform regular and independent reviews. C1 6- Control of Cash Receipts Over-the-Counter Cash Receipts Cash register with locked-in record of transactions. Compare cash register record with cash reported. Cash Receipts by Mail Two people open the mail. Money to cashier’s office. List to accounting dept. Copy of list filed. P1 6- Control of Cash Disbursements All expenditures should be made by check. The only exception is for small payments from petty cash. Separate authorization for check signing and recordkeeping duties. Use a voucher system. P1 6- Bank Reconciliation A bank reconciliation is prepared regularly to explain the difference between cash reported on the bank statement and the cash balance on company’s books. Why are the balances different? * P3 6- Reconciling Items (How to account for debit and credit memoranda) Bank Statement Balance Add: Deposits in transit. Deduct: Outstanding Checks Add or Deduct: Bank errors. Book Balance Add: Collections made by the bank. Add: Interest earned on checking account. Deduct: Non-sufficient funds check (NSF). Deduct: Bank service charge. Add or Deduct: Book errors. P3 6- Bank Reconciliation Example P3 6- End of Chapter 6 6-

• Kế toán - Kiểm toán
• Financial accounting
• Lecture Financial accounting
• Accounting system
• Analyzing cash
• Internal controls
• Principles of internal control
• Issues in financial accounting
• Kế toán tài chính
• Financial statements
• Accounting standards
• Financial reporting
• Financial Accounting Standards Board
• Fundamental financial accounting
• Lecture Fundamental financial accounting concepts
• Financial statement
• Accounting cycle
• Accounting for accruals
• Accounting activities
• Financial accounting practice
• Accounting information system
• Accounting terminology
• Reporting financial results
• Evaluating liquidity
• Business firms
• The financial reporting reform
• Accounting information
• Management accounting
• Accounting equation
• Accounting systems
• Decision making
• External financial reporting
• Accounting for business
• Lecture Accounting for business
• Financial accounting reports
• Statement of financial performance
• Accrual accounting systems
• Statement of financial position
• Mastering financial accounting essentials
• Financial accounting essentials
• Accrual accounting
• Income statement
• Accounting conventions
• Internal control
• Accounting for cash
• Accounting for receivables
• Computing uncollectible accounts expense
• Long term debt
• Accounting for long term debt
• Paper F3
• Revision kit 2016
• Accounting Financial
• Accounting Financial Review
• Financial Review accounting exam
• Study text 2016
• Language of business
• Double entry accounting system
• Credit terminology
• Merchandising businesses
• Accounting for merchandising businesses
• Accounting for inventories
• Cash discounts
• The accounting cycle
• International financial reporting standards
• Completing the accounting cycle
• Accounting worksheet
• Classified balance sheet