Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Five Components of Internal Controls

Financial Accounting

6. Internal Controls and Reporting Cash

Five Components of Internal Controls

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Multiple Choice

Which of the following are the three primary characteristics of an effective control system in a business?

Authorization, documentation, and reconciliation

Segregation of duties, physical controls, and monitoring

Information processing, communication, and compliance

Control environment, risk assessment, and control activities

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Verified step by step guidance

Understand the concept of an effective control system in a business. It is designed to ensure the reliability of financial reporting, compliance with laws and regulations, and the efficiency of operations.

Learn the three primary characteristics of an effective control system: control environment, risk assessment, and control activities. These are fundamental components of internal control as defined by frameworks like COSO (Committee of Sponsoring Organizations of the Treadway Commission).

Control environment refers to the overall attitude, awareness, and actions of management and employees regarding the importance of controls. It sets the tone for the organization.

Risk assessment involves identifying and analyzing risks that could prevent the organization from achieving its objectives. This includes evaluating the likelihood and impact of risks and determining how to address them.

Control activities are the policies and procedures put in place to mitigate risks and ensure that objectives are achieved. Examples include segregation of duties, authorization processes, and physical controls.