ACCt 1080 CH 7 AND 8.docx - ACCT 1080 CH 7,8 Notes Chapter...

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ACCT 1080 CH 7,8 Notes Chapter 7 Three/Four Questions to watch for one word! Chapter 7: internal controls: definition Internal control of Cash receipts a. Mail room employee receives company mail, sends customer checks and remittance advice to treasurer i. Remittance advice - reason for payment b. Treasurer deposits checks in bank through cashier, cashier receives deposit receipt c. Accountant (bookkeeper) uses remittance advice to record journal entries to Cash/Customer accounts d. Controller reviews all of the actions of the day. (Deposits from Treasurer, Debit to Cash from Accountant. Separation of duties Separating operations from accounting Separating asset control from accounting Internal control - Principles A. Safeguard Assets B. Encourage employees to follow company policies C. Promote operational efficiency D. Ensure reliable, accurate, accounting records S.O. Act Requires companies to review and test Accounting client cannot go under managerial duties Petty Cash Increase DR Petty Cash xxx CR Cash xxx Decrease DR Cash xxx
CR Petty Cash xxx Establish DR Petty Cash xxx CR Cash xxx Eliminate Impressed Amount is the amount you should have twice: to replenish, and fill

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