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 is desirable in a good system of internal accounting control?

Separation of duties among employees

Lack of documentation for transactions

Minimal supervision of accounting staff

Allowing one person to handle all aspects of a transaction

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Verified step by step guidance

Understand the concept of internal accounting control: Internal accounting control refers to the processes and procedures implemented by a company to ensure the accuracy and reliability of financial reporting, safeguard assets, and prevent fraud or errors.

Review the principle of separation of duties: Separation of duties is a key component of internal control. It involves dividing responsibilities among different employees to reduce the risk of errors or fraud. For example, one person might handle cash receipts while another records the transactions.

Evaluate the importance of documentation: Proper documentation for transactions is essential in a good internal control system. It provides a clear audit trail and ensures accountability for all financial activities.

Consider the role of supervision: Adequate supervision of accounting staff is necessary to ensure compliance with policies and procedures, detect errors, and prevent fraudulent activities.

Analyze the risks of allowing one person to handle all aspects of a transaction: When one individual is responsible for all parts of a transaction (e.g., authorization, recording, and custody of assets), it increases the risk of fraud or errors due to lack of oversight and accountability.