This document discusses fraud, internal controls, and cash reporting. It begins by defining fraud and internal controls, identifying their key principles. These include establishing responsibility, segregating duties, documenting procedures, and more. It then applies these principles to cash, discussing controls for cash receipts, disbursements, petty cash, and bank accounts. Important controls for bank accounts include deposits, checks, and monthly reconciliation. Reconciling items like deposits in transit and outstanding checks are explained. The document concludes by defining cash equivalents and restricted cash, explaining their reporting on the balance sheet.
Internal control over cash and peety cashJemalSeid25
This document provides an overview of internal controls and cash management. It defines internal control as a system established by a company to safeguard assets and ensure accurate accounting records. The key principles of internal control are segregation of duties, documentation of procedures, and independent verification. Controls over cash receipts and disbursements are also discussed, along with bank reconciliation and cash reporting.
Weygandt kieso kimmel_ch08_fraud_internal control and cashTanjina Rahman
The document discusses internal controls over cash, including defining fraud and internal controls, principles of internal controls, and applications of internal controls to cash receipts and disbursements. It describes operating a petty cash fund and control features of a bank account, and explains reporting cash.
This document provides an overview of chapter 7 from the textbook "Financial Accounting, IFRS Edition" by Weygandt Kimmel Kieso. The chapter covers fraud, internal control, and cash. It defines fraud and internal control, identifies principles of internal control activities, and explains applications of internal control principles to cash receipts and disbursements. It also describes petty cash fund operations, control features of bank accounts including bank reconciliations, and reporting of cash. The document consists of a series of slides with definitions, examples, and review questions.
1. The document defines fraud and internal control, identifies principles of internal control activities, and explains applications of internal control principles to cash receipts and disbursements. It also discusses preparing bank reconciliations, reporting cash, cash management principles, cash budgets, and petty cash funds.
2. Key internal control activities include segregation of duties, documentation procedures, independent verification, and human resource controls. Controls over cash receipts include using prenumbered documents and restricting cash handling. Controls over cash disbursements include using prenumbered checks and a voucher system.
3. Bank reconciliations compare the adjusted cash balance per books to the adjusted cash balance per bank statement. Cash is reported on the balance sheet and
The document discusses the accounting information system and key concepts in the accounting cycle. It provides learning objectives for understanding basic accounting terminology, explaining double-entry rules, identifying steps in the accounting cycle, and recording transactions in journals and ledgers. Key terms are defined, such as assets, liabilities, equity, revenues, expenses, and debits and credits. Examples demonstrate double-entry accounting, the accounting equation, and the steps of the accounting cycle including journalizing, posting, preparing a trial balance, and making adjusting entries.
Here are the steps to analyze and post a journal entry:
1. Analyze the journal entry to determine the accounts involved and whether each account increased or decreased.
2. Determine if each account is an asset, liability, equity, revenue or expense account based on the general ledger chart of accounts.
3. Translate increases in asset and expense accounts and decreases in liability, equity and revenue accounts into debits, and increases in liability, equity and revenue accounts and decreases in asset and expense accounts into credits.
4. Record the debits and credits in the appropriate general ledger accounts.
Posting
Question
LO 6
Internal control over cash is important to safeguard assets and ensure accurate accounting records. Key aspects of internal control for cash receipts include segregating duties among employees who handle cash, using prenumbered documents to record transactions, limiting access to cash, and reconciling daily records. Similarly for cash disbursements, important controls are segregating duties, restricting cheque access and signing, and ensuring supporting documentation. Maintaining a petty cash fund and using banks also aids in effective internal control over cash.
Bab 3 - The Accounting Information Systemmsahuleka
The document discusses key aspects of an accounting information system and the accounting cycle, including basic terminology, double-entry rules, journalizing and posting transactions, preparing adjusting entries, and financial statements. It explains the steps in the accounting cycle such as recording transactions, preparing a trial balance, making adjustments, preparing an adjusted trial balance and financial statements, and closing entries.
Internal control over cash and peety cashJemalSeid25
This document provides an overview of internal controls and cash management. It defines internal control as a system established by a company to safeguard assets and ensure accurate accounting records. The key principles of internal control are segregation of duties, documentation of procedures, and independent verification. Controls over cash receipts and disbursements are also discussed, along with bank reconciliation and cash reporting.
Weygandt kieso kimmel_ch08_fraud_internal control and cashTanjina Rahman
The document discusses internal controls over cash, including defining fraud and internal controls, principles of internal controls, and applications of internal controls to cash receipts and disbursements. It describes operating a petty cash fund and control features of a bank account, and explains reporting cash.
This document provides an overview of chapter 7 from the textbook "Financial Accounting, IFRS Edition" by Weygandt Kimmel Kieso. The chapter covers fraud, internal control, and cash. It defines fraud and internal control, identifies principles of internal control activities, and explains applications of internal control principles to cash receipts and disbursements. It also describes petty cash fund operations, control features of bank accounts including bank reconciliations, and reporting of cash. The document consists of a series of slides with definitions, examples, and review questions.
1. The document defines fraud and internal control, identifies principles of internal control activities, and explains applications of internal control principles to cash receipts and disbursements. It also discusses preparing bank reconciliations, reporting cash, cash management principles, cash budgets, and petty cash funds.
2. Key internal control activities include segregation of duties, documentation procedures, independent verification, and human resource controls. Controls over cash receipts include using prenumbered documents and restricting cash handling. Controls over cash disbursements include using prenumbered checks and a voucher system.
3. Bank reconciliations compare the adjusted cash balance per books to the adjusted cash balance per bank statement. Cash is reported on the balance sheet and
The document discusses the accounting information system and key concepts in the accounting cycle. It provides learning objectives for understanding basic accounting terminology, explaining double-entry rules, identifying steps in the accounting cycle, and recording transactions in journals and ledgers. Key terms are defined, such as assets, liabilities, equity, revenues, expenses, and debits and credits. Examples demonstrate double-entry accounting, the accounting equation, and the steps of the accounting cycle including journalizing, posting, preparing a trial balance, and making adjusting entries.
Here are the steps to analyze and post a journal entry:
1. Analyze the journal entry to determine the accounts involved and whether each account increased or decreased.
2. Determine if each account is an asset, liability, equity, revenue or expense account based on the general ledger chart of accounts.
3. Translate increases in asset and expense accounts and decreases in liability, equity and revenue accounts into debits, and increases in liability, equity and revenue accounts and decreases in asset and expense accounts into credits.
4. Record the debits and credits in the appropriate general ledger accounts.
Posting
Question
LO 6
Internal control over cash is important to safeguard assets and ensure accurate accounting records. Key aspects of internal control for cash receipts include segregating duties among employees who handle cash, using prenumbered documents to record transactions, limiting access to cash, and reconciling daily records. Similarly for cash disbursements, important controls are segregating duties, restricting cheque access and signing, and ensuring supporting documentation. Maintaining a petty cash fund and using banks also aids in effective internal control over cash.
Bab 3 - The Accounting Information Systemmsahuleka
The document discusses key aspects of an accounting information system and the accounting cycle, including basic terminology, double-entry rules, journalizing and posting transactions, preparing adjusting entries, and financial statements. It explains the steps in the accounting cycle such as recording transactions, preparing a trial balance, making adjustments, preparing an adjusted trial balance and financial statements, and closing entries.
This chapter discusses accounting for receivables. There are three main types of receivables: accounts receivable, notes receivable, and other receivables. Accounts receivable arise from credit sales and are recognized as revenue when the sale occurs. Notes receivable are written promises to pay an amount at a future date. Companies value receivables at their net realizable value using an allowance method where bad debts are estimated. The allowance method is preferred over the direct write-off method.
The document provides an overview of the key concepts and steps covered in Chapter 3 of Intermediate Accounting. It discusses the accounting information system and its objectives. The key steps in the accounting cycle are identified as journalizing transactions, posting to ledger accounts, preparing an initial trial balance, adjusting entries, and final financial statements. Basic accounting terminology is defined, including accounts, debits/credits, the accounting equation, and the different types of accounts. Examples are provided to illustrate double-entry accounting and the posting process.
The document provides an overview of the key learning objectives and content covered in Chapter 3 of Intermediate Accounting (IFRS 2nd Edition) by Kieso, Weygandt, and Warfield. The chapter introduces fundamental accounting concepts including the accounting equation, double-entry system, accounting cycle, basic terminology, adjusting entries, and preparation of financial statements. It also discusses how the accounting information system collects and processes transaction data to disseminate financial information to stakeholders.
Ch03-financial reporting and accounting standardsVivi Tazkia
The document provides an overview of the key concepts and steps covered in Chapter 3 of Intermediate Accounting (IFRS 2nd Edition) by Kieso, Weygandt, and Warfield. It outlines 8 learning objectives for the chapter, which include understanding basic accounting terminology, the double-entry system, the accounting cycle, journalizing and posting transactions, adjusting entries, and preparing financial statements. The chapter also discusses the accounting equation, T-accounts, the different types of accounts, and the accounting process from recording transactions to the adjusted trial balance.
ACCT1 C4 ACCT FOR CASH By Aregawi Gebru(MA).pdfAregawi Gebru
Internal controls over cash are important for safeguarding assets and ensuring accurate accounting records. Key controls include separating cash handling duties, requiring authorization for payments, reconciling bank statements, and using pre-numbered documents. A petty cash fund is used to make small payments, while a change fund provides currency for customer transactions. Shortages and overages are recorded in a cash short and over account. A voucher system authorizes expenditures and records liabilities and payments.
The document describes the accounting recording process, including how accounts, debits, credits, journals, ledgers, and trial balances are used. It explains that journals are used to record transactions chronologically, while ledgers contain accounts for assets, liabilities, equity, revenues, and expenses. Transactions are posted from journals to ledgers to update account balances. A trial balance is prepared to check that total debits equal total credits. While useful, a trial balance does not guarantee accurate records as errors can still exist.
This document discusses key concepts in double-entry bookkeeping including accounts, debits and credits, and the basic steps in the recording process. It explains that an account tracks increases and decreases in specific items, and can be represented using a T-account format. It defines debits and credits, explaining that every transaction must have an equal debit and credit to maintain the accounting equation. The basic steps in the recording process are to journalize transactions, post to ledger accounts, and prepare a trial balance.
The document discusses various accounting topics including:
1) Accounts receivable entries that record the disposition of receivables when they are sold to a factor. The entries detail the cash received plus any service charges.
2) Bad debts are accounted for under the direct write-off method by recording an adjusting entry to bad debt expense to write off a specific customer's uncollectible balance.
3) Receivables are frequently classified as accounts receivable, notes receivable, and other receivables.
This document provides information about a financial accounting course at Eelo University in Borama, Somaliland. It introduces the lecturer, Professor Abdi Ali Hassan, who holds a B.Sc. and MBA in Strategic Management from the University of Nairobi. It also provides Professor Abdi's contact information.
The document provides an overview of the key steps and concepts in the accounting recording process, including:
1. Defining accounts, debits and credits, journals, ledgers, and the trial balance. Accounts track increases and decreases to specific items and use debits and credits to record transactions.
2. Outlining the basic steps as analyzing transactions, journalizing, posting to ledger accounts, and preparing a trial balance. Journals provide a chronological record and ledgers contain all accounts.
3. Explaining the purposes and limitations of the trial balance in checking that debits equal credits but not ensuring all transactions are recorded correctly.
Sure, let's go through the main concepts of financial statements, their advantages and disadvantages, and provide examples and relevant ratio calculations.
Main Financial Statements
1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
4. Statement of Changes in Equity
1. Income Statement
Concept:
• Shows the company's revenues, expenses, and profits or losses over a specific period.
• Key components include revenues, cost of goods sold (COGS), gross profit, operating expenses, operating income, interest, taxes, and net income.
Advantages:
• Provides a clear picture of profitability.
• Helps in assessing operational efficiency.
• Useful for trend analysis over different periods.
Disadvantages:
• Can be manipulated through accounting practices.
• Does not provide a complete financial health picture (e.g., cash flow).
Example:
Sure, let's go through the main concepts of financial statements, their advantages and disadvantages, and provide examples and relevant ratio calculations.
Main Financial Statements
1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
4. Statement of Changes in Equity
1. Income Statement
Concept:
• Shows the company's revenues, expenses, and profits or losses over a specific period.
• Key components include revenues, cost of goods sold (COGS), gross profit, operating expenses, operating income, interest, taxes, and net income.
Advantages:
• Provides a clear picture of profitability.
• Helps in assessing operational efficiency.
• Useful for trend analysis over different periods.
Disadvantages:
• Can be manipulated through accounting practices.
• Does not provide a complete financial health picture (e.g., cash flow).
Example:
The document describes the basic accounting process of recording transactions. It explains that each transaction affects at least two accounts, with equal debits and credits, to keep the accounting equation in balance. A journal is used to initially record transactions in chronological order before they are posted to individual accounts in the general ledger. Ledger accounts track increases and decreases to assets, liabilities, equity, revenues and expenses, with standard rules for whether balances are normally debit or credit. A trial balance is prepared to check that total debits equal total credits after all posting, but may still balance with certain types of errors present.
Chapter 2, Fundamentals of Accounting I (2).pptxKalkaye
This document provides an overview of the accounting cycle for service businesses. It discusses key concepts like accounts, debits and credits, journals, ledgers, and the steps in the recording process. The recording process involves analyzing transactions, recording them in a journal, and then posting the journal entries to the appropriate accounts in the general ledger. Adjusting entries, preparing an adjusted trial balance, and closing entries are also part of the full accounting cycle.
The document provides details on recording business transactions for Pioneer Advertising Agency using journal entries. It lists 11 transactions in chronological order from January 10 to October 31, including C.R. Byrd investing cash to start the business, purchasing office equipment, receiving cash from a client in advance, paying rent and insurance, purchasing supplies on credit, hiring employees, Byrd withdrawing cash, paying employee salaries, and receiving cash from a client for services. For each transaction, the general journal is updated with debits and credits to the appropriate accounts.
1. Accounting involves identifying, recording, and communicating the economic events of an organization to interested users both internal and external.
2. It explains key concepts like ethics, principles, assumptions, and the accounting equation which balances assets, liabilities, and owner's equity.
3. The accounting equation forms the framework for analyzing how transactions affect financial records by increasing or decreasing at least two components of the equation.
The document discusses accounting and provides learning objectives about identifying activities and users of accounting, explaining the building blocks of accounting, stating the accounting equation and defining its components, and analyzing the effects of business transactions on the accounting equation. Specifically, it defines the three activities in accounting as identifying, recording, and communicating economic events. It also introduces the accounting equation and its components of assets, liabilities, and owner's equity. Sample business transactions are provided to illustrate how they affect changes to the accounting equation.
This document provides an overview of the accounting cycle and accounting information system. It begins with learning objectives that cover basic accounting terminology, double-entry rules, steps in the accounting cycle including journalizing, posting, trial balances and financial statements. The accounting cycle is then explained through examples of transactions being recorded in journals and posted to ledger accounts. The purpose of the accounting information system is also summarized as collecting, processing and disseminating financial information to interested parties like management.
This chapter discusses accounting for receivables. There are three main types of receivables: accounts receivable, notes receivable, and other receivables. Accounts receivable arise from credit sales and are recognized as revenue when the sale occurs. Notes receivable are written promises to pay an amount at a future date. Companies value receivables at their net realizable value using an allowance method where bad debts are estimated. The allowance method is preferred over the direct write-off method.
The document provides an overview of the key concepts and steps covered in Chapter 3 of Intermediate Accounting. It discusses the accounting information system and its objectives. The key steps in the accounting cycle are identified as journalizing transactions, posting to ledger accounts, preparing an initial trial balance, adjusting entries, and final financial statements. Basic accounting terminology is defined, including accounts, debits/credits, the accounting equation, and the different types of accounts. Examples are provided to illustrate double-entry accounting and the posting process.
The document provides an overview of the key learning objectives and content covered in Chapter 3 of Intermediate Accounting (IFRS 2nd Edition) by Kieso, Weygandt, and Warfield. The chapter introduces fundamental accounting concepts including the accounting equation, double-entry system, accounting cycle, basic terminology, adjusting entries, and preparation of financial statements. It also discusses how the accounting information system collects and processes transaction data to disseminate financial information to stakeholders.
Ch03-financial reporting and accounting standardsVivi Tazkia
The document provides an overview of the key concepts and steps covered in Chapter 3 of Intermediate Accounting (IFRS 2nd Edition) by Kieso, Weygandt, and Warfield. It outlines 8 learning objectives for the chapter, which include understanding basic accounting terminology, the double-entry system, the accounting cycle, journalizing and posting transactions, adjusting entries, and preparing financial statements. The chapter also discusses the accounting equation, T-accounts, the different types of accounts, and the accounting process from recording transactions to the adjusted trial balance.
ACCT1 C4 ACCT FOR CASH By Aregawi Gebru(MA).pdfAregawi Gebru
Internal controls over cash are important for safeguarding assets and ensuring accurate accounting records. Key controls include separating cash handling duties, requiring authorization for payments, reconciling bank statements, and using pre-numbered documents. A petty cash fund is used to make small payments, while a change fund provides currency for customer transactions. Shortages and overages are recorded in a cash short and over account. A voucher system authorizes expenditures and records liabilities and payments.
The document describes the accounting recording process, including how accounts, debits, credits, journals, ledgers, and trial balances are used. It explains that journals are used to record transactions chronologically, while ledgers contain accounts for assets, liabilities, equity, revenues, and expenses. Transactions are posted from journals to ledgers to update account balances. A trial balance is prepared to check that total debits equal total credits. While useful, a trial balance does not guarantee accurate records as errors can still exist.
This document discusses key concepts in double-entry bookkeeping including accounts, debits and credits, and the basic steps in the recording process. It explains that an account tracks increases and decreases in specific items, and can be represented using a T-account format. It defines debits and credits, explaining that every transaction must have an equal debit and credit to maintain the accounting equation. The basic steps in the recording process are to journalize transactions, post to ledger accounts, and prepare a trial balance.
The document discusses various accounting topics including:
1) Accounts receivable entries that record the disposition of receivables when they are sold to a factor. The entries detail the cash received plus any service charges.
2) Bad debts are accounted for under the direct write-off method by recording an adjusting entry to bad debt expense to write off a specific customer's uncollectible balance.
3) Receivables are frequently classified as accounts receivable, notes receivable, and other receivables.
This document provides information about a financial accounting course at Eelo University in Borama, Somaliland. It introduces the lecturer, Professor Abdi Ali Hassan, who holds a B.Sc. and MBA in Strategic Management from the University of Nairobi. It also provides Professor Abdi's contact information.
The document provides an overview of the key steps and concepts in the accounting recording process, including:
1. Defining accounts, debits and credits, journals, ledgers, and the trial balance. Accounts track increases and decreases to specific items and use debits and credits to record transactions.
2. Outlining the basic steps as analyzing transactions, journalizing, posting to ledger accounts, and preparing a trial balance. Journals provide a chronological record and ledgers contain all accounts.
3. Explaining the purposes and limitations of the trial balance in checking that debits equal credits but not ensuring all transactions are recorded correctly.
Sure, let's go through the main concepts of financial statements, their advantages and disadvantages, and provide examples and relevant ratio calculations.
Main Financial Statements
1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
4. Statement of Changes in Equity
1. Income Statement
Concept:
• Shows the company's revenues, expenses, and profits or losses over a specific period.
• Key components include revenues, cost of goods sold (COGS), gross profit, operating expenses, operating income, interest, taxes, and net income.
Advantages:
• Provides a clear picture of profitability.
• Helps in assessing operational efficiency.
• Useful for trend analysis over different periods.
Disadvantages:
• Can be manipulated through accounting practices.
• Does not provide a complete financial health picture (e.g., cash flow).
Example:
Sure, let's go through the main concepts of financial statements, their advantages and disadvantages, and provide examples and relevant ratio calculations.
Main Financial Statements
1. Income Statement
2. Balance Sheet
3. Cash Flow Statement
4. Statement of Changes in Equity
1. Income Statement
Concept:
• Shows the company's revenues, expenses, and profits or losses over a specific period.
• Key components include revenues, cost of goods sold (COGS), gross profit, operating expenses, operating income, interest, taxes, and net income.
Advantages:
• Provides a clear picture of profitability.
• Helps in assessing operational efficiency.
• Useful for trend analysis over different periods.
Disadvantages:
• Can be manipulated through accounting practices.
• Does not provide a complete financial health picture (e.g., cash flow).
Example:
The document describes the basic accounting process of recording transactions. It explains that each transaction affects at least two accounts, with equal debits and credits, to keep the accounting equation in balance. A journal is used to initially record transactions in chronological order before they are posted to individual accounts in the general ledger. Ledger accounts track increases and decreases to assets, liabilities, equity, revenues and expenses, with standard rules for whether balances are normally debit or credit. A trial balance is prepared to check that total debits equal total credits after all posting, but may still balance with certain types of errors present.
Chapter 2, Fundamentals of Accounting I (2).pptxKalkaye
This document provides an overview of the accounting cycle for service businesses. It discusses key concepts like accounts, debits and credits, journals, ledgers, and the steps in the recording process. The recording process involves analyzing transactions, recording them in a journal, and then posting the journal entries to the appropriate accounts in the general ledger. Adjusting entries, preparing an adjusted trial balance, and closing entries are also part of the full accounting cycle.
The document provides details on recording business transactions for Pioneer Advertising Agency using journal entries. It lists 11 transactions in chronological order from January 10 to October 31, including C.R. Byrd investing cash to start the business, purchasing office equipment, receiving cash from a client in advance, paying rent and insurance, purchasing supplies on credit, hiring employees, Byrd withdrawing cash, paying employee salaries, and receiving cash from a client for services. For each transaction, the general journal is updated with debits and credits to the appropriate accounts.
1. Accounting involves identifying, recording, and communicating the economic events of an organization to interested users both internal and external.
2. It explains key concepts like ethics, principles, assumptions, and the accounting equation which balances assets, liabilities, and owner's equity.
3. The accounting equation forms the framework for analyzing how transactions affect financial records by increasing or decreasing at least two components of the equation.
The document discusses accounting and provides learning objectives about identifying activities and users of accounting, explaining the building blocks of accounting, stating the accounting equation and defining its components, and analyzing the effects of business transactions on the accounting equation. Specifically, it defines the three activities in accounting as identifying, recording, and communicating economic events. It also introduces the accounting equation and its components of assets, liabilities, and owner's equity. Sample business transactions are provided to illustrate how they affect changes to the accounting equation.
This document provides an overview of the accounting cycle and accounting information system. It begins with learning objectives that cover basic accounting terminology, double-entry rules, steps in the accounting cycle including journalizing, posting, trial balances and financial statements. The accounting cycle is then explained through examples of transactions being recorded in journals and posted to ledger accounts. The purpose of the accounting information system is also summarized as collecting, processing and disseminating financial information to interested parties like management.
How to Build a Module in Odoo 17 Using the Scaffold MethodCeline George
Odoo provides an option for creating a module by using a single line command. By using this command the user can make a whole structure of a module. It is very easy for a beginner to make a module. There is no need to make each file manually. This slide will show how to create a module using the scaffold method.
How to Fix the Import Error in the Odoo 17Celine George
An import error occurs when a program fails to import a module or library, disrupting its execution. In languages like Python, this issue arises when the specified module cannot be found or accessed, hindering the program's functionality. Resolving import errors is crucial for maintaining smooth software operation and uninterrupted development processes.
it describes the bony anatomy including the femoral head , acetabulum, labrum . also discusses the capsule , ligaments . muscle that act on the hip joint and the range of motion are outlined. factors affecting hip joint stability and weight transmission through the joint are summarized.
Strategies for Effective Upskilling is a presentation by Chinwendu Peace in a Your Skill Boost Masterclass organisation by the Excellence Foundation for South Sudan on 08th and 09th June 2024 from 1 PM to 3 PM on each day.
Exploiting Artificial Intelligence for Empowering Researchers and Faculty, In...Dr. Vinod Kumar Kanvaria
Exploiting Artificial Intelligence for Empowering Researchers and Faculty,
International FDP on Fundamentals of Research in Social Sciences
at Integral University, Lucknow, 06.06.2024
By Dr. Vinod Kumar Kanvaria
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UPRAHUL
This Dissertation explores the particular circumstances of Mirzapur, a region located in the
core of India. Mirzapur, with its varied terrains and abundant biodiversity, offers an optimal
environment for investigating the changes in vegetation cover dynamics. Our study utilizes
advanced technologies such as GIS (Geographic Information Systems) and Remote sensing to
analyze the transformations that have taken place over the course of a decade.
The complex relationship between human activities and the environment has been the focus
of extensive research and worry. As the global community grapples with swift urbanization,
population expansion, and economic progress, the effects on natural ecosystems are becoming
more evident. A crucial element of this impact is the alteration of vegetation cover, which plays a
significant role in maintaining the ecological equilibrium of our planet.Land serves as the foundation for all human activities and provides the necessary materials for
these activities. As the most crucial natural resource, its utilization by humans results in different
'Land uses,' which are determined by both human activities and the physical characteristics of the
land.
The utilization of land is impacted by human needs and environmental factors. In countries
like India, rapid population growth and the emphasis on extensive resource exploitation can lead
to significant land degradation, adversely affecting the region's land cover.
Therefore, human intervention has significantly influenced land use patterns over many
centuries, evolving its structure over time and space. In the present era, these changes have
accelerated due to factors such as agriculture and urbanization. Information regarding land use and
cover is essential for various planning and management tasks related to the Earth's surface,
providing crucial environmental data for scientific, resource management, policy purposes, and
diverse human activities.
Accurate understanding of land use and cover is imperative for the development planning
of any area. Consequently, a wide range of professionals, including earth system scientists, land
and water managers, and urban planners, are interested in obtaining data on land use and cover
changes, conversion trends, and other related patterns. The spatial dimensions of land use and
cover support policymakers and scientists in making well-informed decisions, as alterations in
these patterns indicate shifts in economic and social conditions. Monitoring such changes with the
help of Advanced technologies like Remote Sensing and Geographic Information Systems is
crucial for coordinated efforts across different administrative levels. Advanced technologies like
Remote Sensing and Geographic Information Systems
9
Changes in vegetation cover refer to variations in the distribution, composition, and overall
structure of plant communities across different temporal and spatial scales. These changes can
occur natural.
LAND USE LAND COVER AND NDVI OF MIRZAPUR DISTRICT, UP
Chapter 8.pptx
1. 8-1
Fraud, Internal Control, and
Cash
8
Learning Objectives
Discuss fraud and the principles of internal control.
Apply internal control principles to cash.
Identify the control features of a bank account.
3
Explain the reporting of cash.
2
1
4
2. Illustration 8-1
Fraud triangle
Fraud
Dishonest act by an employee that results in personal benefit
to the employee at a cost to the employer.
Three factors that
contribute to
fraudulent activity.
LEARNING
OBJECTIVE
Discuss fraud and the principles of
internal control.
1
8-2 LO 1
3. Methods and measures adopted to:
● Safeguard assets.
● Enhance the reliability of accounting records.
● Increase efficiency of operations.
● Ensure compliance with laws and regulations.
Internal Control
8-3 LO 1
4. Five Primary Components:
● A control environment.
● Risk assessment.
● Control activities.
● Information and communication.
● Monitoring.
Internal Control
8-4 LO 1
5. ESTABLISHMENT OF RESPONSIBILITY
Control is most effective when only
one person is responsible for a
given task.
Establishing responsibility often
requires limiting access only to
authorized personnel, and then
identifying those personnel.
Principles of Internal Control Activities
8-5 LO 1
6. SEGREGATION OF DUTIES
Different individuals should be
responsible for related activities.
The responsibility for record-
keeping for an asset should be
separate from the physical
custody of that asset.
Principles of Internal Control Activities
8-6 LO 1
7. DOCUMENTATION PROCEDURES
Companies should use
prenumbered documents, and
all documents should be
accounted for.
Employees should promptly
forward source documents for
accounting entries to the
accounting department.
Principles of Internal Control Activities
8-7 LO 1
9. INDEPENDENT INTERNAL VERIFICATION
Records
periodically verified
by an employee
who is independent.
Discrepancies
reported to
management.
Principles of Internal Control Activities
8-9 LO 1
Illustration 8-3
Comparison of segregation of duties
principle with independent internal
verification principle
10. HUMAN RESOURCE CONTROLS
Bond employees who handle
cash.
Rotate employees’ duties
and require vacations.
Conduct background checks.
Principles of Internal Control Activities
8-10 LO 1
11. Identify which control activity is violated in each of the following
situations, and explain how the situation creates an opportunity for a
fraud.
1. The person with primary responsibility for reconciling the bank
account and making all bank deposits is also the company’s
accountant.
Solution
Violates the control activity of segregation of duties.
Recordkeeping should be separate from physical custody.
Employee could embezzle cash and make journal entries to hide
the theft.
Control Activities
DO IT! 1
8-11 LO 1
12. Identify which control activity is violated in each of the following
situations, and explain how the situation creates an opportunity for a
fraud.
2. Wellstone Company’s treasurer received an award for
distinguished service because he had not taken a vacation in 30
years.
Solution
Violates the control activity of human resource controls.
Key employees must take vacations.
Treasurer, who manages the company’s cash, might embezzle
cash and use his position to conceal the theft.
Control Activities
DO IT! 1
8-12 LO 1
13. Identify which control activity is violated in each of the following
situations, and explain how the situation creates an opportunity for a
fraud.
3. In order to save money spent on order slips and to reduce time
spent keeping track of order slips, a local bar/restaurant does not
buy prenumbered order slips.
Solution
Violates the control activity of documentation procedures.
If prenumbered documents are not used, then it is virtually
impossible to account for the documents.
An employee could write up a dinner sale, receive cash from the
customer, and then throw away the order slip and keep the cash.
Control Activities
DO IT! 1
8-13 LO 1
14. Cash Receipt Controls
LEARNING
OBJECTIVE
2 Apply internal control principles to cash.
Illustration 8-4
Application of internal
control principles to cash
receipts
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17. MAIL RECEIPTS
Mail receipts should be opened by two mail clerks, a list
prepared, and each check endorsed “For Deposit Only.”
Each mail clerk signs the list to establish responsibility for
the data.
Original copy of the list, along with the checks, is sent to the
cashier’s department.
Copy of the list is sent to the accounting department for
recording. Clerks also keep a copy.
Cash Receipt Controls
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18. Question
Permitting only designated personnel to handle cash receipts
is an application of the principle of:
a. segregation of duties.
b. establishment of responsibility.
c. independent check.
d. other controls.
Cash Receipt Controls
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19. Generally, internal control over cash disbursements is more
effective when companies pay by check or electronic funds
transfer (EFT) rather than by cash.
One exception is payments for incidental amounts that are paid
out of petty cash.
Cash Disbursement Controls
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20. Cash Disbursement
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Illustration 8-6
Application of internal
control principles to cash
disbursements
22. Question
The use of prenumbered checks in disbursing cash is an
application of the principle of:
a. segregation of duties.
b. establishment of responsibility.
c. physical, mechanical, and electronic controls.
d. documentation procedures.
Cash Disbursement Controls
8-22 LO 2
23. VOUCHER SYSTEM CONTROLS
A network of approvals by authorized individuals, acting
independently, to ensure all disbursements by check are
proper.
A voucher is an authorization form prepared for each
expenditure in a voucher system.
Cash Disbursement Controls
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24. Petty Cash Fund - Used to pay small amounts.
Involves:
1. establishing the fund,
2. making payments from the
fund, and
3. replenishing the fund.
Petty Cash Fund
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25. ESTABLISHING THE PETTY CASH FUND
Illustration: If Laird Company decides to establish a $100 fund
on March 1, the journal entry is:
Petty Cash 100
Cash
March 1
100
Petty Cash Fund
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26. REPLENISHING THE PETTY CASH FUND
Illustration: On March 15 Laird’s petty cash custodian requests a
check for $87. The fund contains $13 cash and petty cash
receipts for postage $44, freight-out $38, and miscellaneous
expenses $5. The journal entry is:
March 15 Postage Expense 44
Freight-Out 38
Miscellaneous Expense 5
Cash 87
Petty Cash Fund
8-26 LO 2
27. Illustration: Assume in the preceding example that the custodian
had only $12 in cash in the fund plus the receipts as listed. The
request for reimbursement would therefore be for $88, and Laird
would make the following entry.
March 15 Postage Expense 44
Freight-Out 38
Miscellaneous Expense 5
Cash Over and Short 1
Cash 88
Petty Cash Fund
8-27 LO 2
28. Bateer Company established a $50 petty cash fund on July 1. On
July 30, the fund had $12 cash remaining and petty cash receipts for
postage $14, office supplies $10, and delivery expense $15. Prepare
journal entries to establish the fund on July 1 and to replenish the
fund on July 30.
Solution
DO IT! Petty Cash Fund
2b
8-28 LO 2
Petty Cash 50
Cash 50
30 Postage Expense 14
Supplies 10
Delivery Expense 15
Cash Over and Short 1
Cash 38
July 1
29. The use of a bank contributes significantly to good internal
control over cash.
Minimizes the amount of currency on hand.
Creates a double record of bank transactions.
Bank reconciliation.
LEARNING
OBJECTIVE
Identify the control features of a bank
account.
3
8-29 LO 2
31. Written order signed by depositor directing bank to pay a
specified sum of money to a designated recipient.
Maker
Payee
Payer
Writing Checks
Illustration 8-9
Check
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32. DEBIT
MEMORANDUM
Bank service charge.
NSF (not sufficient
funds).
CREDIT
MEMORANDUM
Collect notes
receivable.
Interest earned.
Illustration 8-10
Bank Statements
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33. Question
The control features of a bank account do not include:
a. having bank auditors verify the correctness of the bank
balance per books.
b. minimizing the amount of cash that must be kept on
hand.
c. providing a double record of all bank transactions.
d. safeguarding cash by using a bank as a depository.
Bank Statements
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34. Reconcile balance per books and balance per bank to their
“correct” or “true” balance.
Reconciling Items:
1. Deposits in transit.
2. Outstanding checks.
3. Bank memoranda.
4. Errors.
Time Lags
Reconciling the Bank Account
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35. RECONCILIATION PROCEDURES
+ Deposit in Transit
- Outstanding Checks
+/- Bank Errors
+ Notes collected by bank
- NSF (bounced) checks
- Check printing or other
service charges
+/- Company Errors
CORRECT BALANCE CORRECT BALANCE
Reconciling the Bank Account
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Illustration 8-11
Bank reconciliation
adjustments
37. Illustration: Prepare a bank reconciliation at April 30.
Cash balance per bank statement $15,907.45
Deposit in transit 2,201.40
Outstanding checks (5,904.00)
Adjusted cash balance per bank $12,204.85
Cash balance per books $11,589.45
Error in check No. 443 36.00
NSF check (425.60)
Bank service charge (30.00)
Collection of notes receivable 1,035.00
Adjusted cash balance per books $12,204.85
RECONCILIATION PROCEDURES
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38. ENTRIES FROM BANK RECONCILIATION
COLLECTION OF NOTE RECEIVABLE: Assuming interest of
$50 has not been accrued and collection fee is charged to
Miscellaneous Expense, the entry is:
Apr. 30 Cash 1,035.00
Miscellaneous Expense
Notes Receivable
15.00
1,000.00
Interest Revenue 50.00
Reconciling the Bank Account
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39. BOOK ERROR: The cash disbursements journal shows that
check no. 443 was a payment on account to Andrea Company, a
supplier. The correcting entry is:
Cash 36.00
Accounts Payable
Apr. 30
36.00
NSF CHECK: As indicated earlier, an NSF check becomes an
account receivable to the depositor. The entry is:
Accounts Receivable 425.60
Cash
Apr. 30
425.60
ENTRIES FROM BANK RECONCILIATION
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40. BANK SERVICE CHARGES: Depositors debit check printing
charges (DM) and other bank service charges (SC) to
Miscellaneous Expense. The entry is:
Miscellaneous Expense 30.00
Cash
Apr. 30
30.00
Illustration 8-13
ENTRIES FROM BANK RECONCILIATION
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41. Question
The reconciling item in a bank reconciliation that will result in
an adjusting entry by the depositor is:
a. outstanding checks.
b. deposit in transit.
c. a bank error.
d. bank service charges.
Reconciling the Bank Account
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42. Disbursement systems that uses wire, telephone, or
computers to transfer cash balances between locations.
EFT transfers normally result in better internalcontrol
since no cash or checks are handled by company
employees.
Electronic Funds Transfer (EFT) System
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43. Deduct from balance per books.
Add to balance per books.
Deduct from balance per bank.
Add to balance per bank.
Sally Kist owns Linen Kist Fabrics. Sally asks you to explain how she
should treat the following reconciling items when reconciling the
company’s bank account: (1) a debit memorandum for an NSF check,
(2) a credit memorandum for a note collected by the bank, (3)
outstanding checks, and (4) a deposit in transit.
Solution
Sally should treat the reconciling items as follows.
(1) NSF check:
(2)Collection of note:
(3)Outstanding checks:
(4) Deposit in transit:
Bank Reconciliation
DO IT! 3
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44. Cash Equivalents
Cash equivalents are short-term, highly liquid investments
that are both:
1. Readily convertible to known amounts of cash, and
2. So near their maturity that their market value is relatively
insensitive to changes in interest rates.
Restricted Cash
Cash that is not available for general use but rather is
restricted for a special purpose.
LEARNING
OBJECTIVE Explain the reporting of cash.
4
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46. Reporting Cash
Question
Which of the following statements correctly describes the
reporting of cash?
a. Cash cannot be combined with cash equivalents.
b. Restricted cash fund may be combined with Cash.
c. Cash is listed first in the current assets section.
d. Restricted cash funds cannot be reported as a current
asset.
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47. Indicate whether each of the following is true or false.
1. Cash and cash equivalents are comprised of coins,
currency (paper money), money orders, and NSF
checks.
2. Restricted cash is classified as either a current asset or
noncurrent asset, depending on the circumstances.
3. A company may have a negative balance in its bank
account. In this case, it should offset this negative
balance against cash and cash equivalents on the
balance sheet.
4. Because cash and cash equivalents often include short-
term investments, accounts receivable should be
reported as the first item on the balance sheet.
Reporting Cash
DO IT! 4
False
True
False
False
8-47 LO 5