TAILIEUCHUNG - Lecture Fundamental accounting principles (19/e) - Chapter 8: Cash and internal controls

After completing this chapter you should be able to: Define internal control and identify its purpose and principles, define cash and cash equivalents and explain how to report them, compute the days’ sales uncollected ratio and use it to assess liquidity. | CASH AND INTERNAL CONTROLS Chapter 8 Chapter 8: Accounting for Cash and Internal Controls PRINCIPLES OF INTERNAL CONTROL Internal control principles common to all companies: 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. C 1 Principles of internal control include: Establish responsibilities. Proper internal control means that responsibility for a task is clearly established and assigned to one person. Maintain adequate records. Good recordkeeping is part of an internal control system. It helps protect assets and ensures that employees use prescribed procedures. Insure assets and bond key employees. Good internal control means that assets are adequately insured against casualty and that employees handling large amounts of cash and easily transferable assets are bonded. Separate recordkeeping from custody of assets. A person who controls or has access to an asset must not keep that asset’s accounting records. Divide responsibility for related transactions. Good internal control divides responsibility for a transaction or a series of related transactions between two or more individuals or departments. Apply technological controls. Cash registers, check protectors, time clocks, and personal identification scanners are examples of devices that can improve internal control. Perform regular and independent reviews. Changes in personnel, technological advances, and normal business pressures for performance necessitate reviews to ensure that proper procedures are being followed on a consistent basis. TECHNOLOGY AND INTERNAL CONTROL Reduced Processing Errors More Extensive Testing of Records Limited Evidence of Processing Crucial Separation of Duties Increased e-commerce C 1 The use of technology has an impact on internal controls. Technology can help

• Kế toán - Kiểm toán
• Accounting principles
• Fundamental accounting principles
• Lecture Fundamental accounting principles
• Internal controls
• Control of cash
• Banking activities
• Accounting information systems
• Fundamental system principles
• Technology based accounting systems
• Accounting information
• Financial accounting
• Managerial accounting
• Managerial cost
• Reporting manufacturing activities
• Merchandising operations
• Accounting cycle
• Completing the accounting cycle
• Classified balance sheet
• Accounting for partnerships
• Partnership form of organization
• Basic partnership accounting