KIC000076 - Increase Increase-Inventory Purchases Sell...

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CHAPTER 6 Internal Control and Financial Reporting for Cash and Merchandising Operations Chop_ 6 Types of Businesses s-Service }> Merchandising » Manufacturer A«!2M )E:. Internal Contra Is * What do you do to keep your assets safe and records accurate? ,,; Establish responsibi Iity .J Segregate duties '" Restrict access . J Document procedures -J Independently verify Aoct2S4 Cbop.6
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. ------------------ ---- * Bank Reconciliation '* Adios,men" 10Books boolL. boJClJ1Q. . - Bank Service Charges - NSF Checks + Interest Adjustmentto Bank: b'Cv'll bll\b~Q - Outstanding checks + Deposits in transit ./ Correct tor any errors 4 Cash and Cash Equivalents s-Cash equivalents are short-term, highly liquid investments with three months or less to maturity »Cash and cash equivalents are presented as a single item on the balance sheet ';l(; Cost of Goods Sold *. COGS~ Beginning Inventory + Purchases - Ending Inventory 6 C'bap,~
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)f; Perpetual vs, Periodic lnventory System?j{ Item Perpetual Periodic Buy Inventory
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Unformatted text preview: Increase Increase-Inventory Purchases Sell inventory Increase COGS INo entry-Reduce Inventorv Count Adjust balance to Record inventory, Inventory , count close purchases land create cost of laoods sold 7 * Purchase and Sales Adjustments * ~ Purchase returns and allowances: deduct from cost of inventory purchases Purchase discount: cash discount given for early payment 6-tJvdc )- Sales returns and allowances: deduct from sales revenue ). Sales discount: cash discount given for early payment FOB shipping point" vs. FOB destination ). Net Sales 0: : Gross Sales- Sales R&A-Sales Disc. ""<1214 Ratio Analysis );> Recall from multistep income statement, Net Sales - COGS = Gross Profit rGross Profit Percentage GP% = Gross Profit Net Sales 9 Cbap.6 C"p, 6 C~\(er ~Jef t O\(ers:'f a rv}. MIlF-.e,. PyO f \ r...
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This note was uploaded on 09/01/2011 for the course ACCT 284 taught by Professor Clem during the Fall '08 term at Iowa State.

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KIC000076 - Increase Increase-Inventory Purchases Sell...

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