accounting 3b book notes

accounting 3b book notes - Chapter 6: Reporting and...

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Chapter 6: Reporting and Analyzing Inventory Classifying inventory merchandising: inventory consists of many different items [ie grocery store] manufacturing: o finished goods inventory [complete and ready for sale] o work I process [been placed into the production process but not yet complete] o raw materials: basic goods that will be used in production but have not yet been placed into production Chapter 7: Internal Control and Cash Internal Control refers to: o safeguarding its assets from employee theft, robbery, unauthorized use o enhancing the accuracy and reliability of its accounting records by reducing the risk of errors and irregularities The Sarbanes-Oxley Act forces companies to pay more attention to internal controls Principles of Internal Control Establishment of responsibility: control is most effective when only one person is responsible for a given task Segregation of duties: work of one employee should, without a duplication of effort, provide a reliable basis for evaluating the work of another employee Related activities: making one individual responsible for all of the related
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accounting 3b book notes - Chapter 6: Reporting and...

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