Chapter 7 Notes

Chapter 7 Notes - -Over 2 years, the total net income is...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Chapter 7 Notes: Fraud, Internal Control, and Cash -Components of internal control systems: -a control environment -risk assessment -control activities -information and communication -monitoring -Principles of control activities: -establishment of responsibility -segregation of duties -documentation procedures -physical controls -independent internal verification -human resource controls -HR Controls -bond employees who handle cash -rotate employees’ duties and require employees to take vacations -conduct thorough background checks -Imprest system (petty cash) -establishing the fund -making payments from the fund -replenishing the fund -D Petty cash C Cash -D Expenses C Cash -market value= replacement cost not selling price -BI + COGP –EI=COGS
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: -Over 2 years, the total net income is correct because 2 errors cancel out-Disclose:-major inventory classifications-basis of accounting (cost or LCM)-costing method-Estimating inventories-GP Rate= (net sales-COGS)/net sales-assumption: gp rate=gp rate (expected)-gp rate= (net sales-estimated COGS)/net sales-estimated ending inventory=COGAS-estimated COGS-No journal entries for payments from petty cash fund-DM-bank service charge-NSF check-CM-collect notes receivable-interest earned-Adjustments to bank balance per bank-deposits in transit-outstanding checks-bank errors-adjustments to book balance-notes collected by bank-NSF checks-check printing or service charges-company errors...
View Full Document

This note was uploaded on 11/15/2011 for the course ACCT 272 taught by Professor Mensah during the Fall '08 term at Rutgers.

Page1 / 2

Chapter 7 Notes - -Over 2 years, the total net income is...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online