会计学原理英文课件：Chapter_08 Cash and Internal Controls

1、 2009 The McGraw-Hill Companies, Inc., 2009 The McGraw-Hill Companies, Inc., All Rights ReservedAll Rights ReservedCASH ANDINTERNAL CONTROLSChapter 8McGraw-Hill/IrwinSlide 2McGraw-Hill/IrwinSlide 2PURPOSE OF INTERNAL CONTROLPolicies and procedures managers use to: Protect assets.Ensure reliable acco

2、unting.Promote efficient operations.Urge adherence to company policies. C 1McGraw-Hill/IrwinSlide 3McGraw-Hill/IrwinSlide 3PURPOSE OF INTERNAL CONTROLThe Sarbanes-Oxley Act requires managers and auditors of public companies to document and certify the system of internal controls. Specific requiremen

3、ts related to auditors are: Auditors must evaluate internal controls and issue internal control reports. Auditors of a client are restricted as to what consulting services they can perform for that client. The person leading an audit can serve no more than seven years without a two-year break. Audit

4、ors work is overseen by the Public Company Accounting Oversight Board. Harsh penalties exist for violators sentences up to 25 years in prison with severe fines. C 1McGraw-Hill/IrwinSlide 4McGraw-Hill/IrwinSlide 4PRINCIPLES OF INTERNAL CONTROLInternal control principles common to all companies:1.Esta

5、blish responsibilities.2.Maintain adequate records.3.Insure assets and bond key employees.4.Separate recordkeeping from custody of assets.5.Divide responsibility for related transactions.6.Apply technological controls.7.Perform regular and independent reviews.C 1McGraw-Hill/IrwinSlide 5McGraw-Hill/I

6、rwinSlide 5TECHNOLOGY AND INTERNAL CONTROLReducedProcessingErrorsMoreExtensive Testingof RecordsLimitedEvidence ofProcessingCrucialSeparation ofDutiesIncreased e-commerceC 1McGraw-Hill/IrwinSlide 6McGraw-Hill/IrwinSlide 6LIMITATIONS OF INTERNAL CONTROLHuman ErrorNegligenceFatigueMisjudgmentConfusion

7、Human FraudIntent todefeat internalcontrols forpersonal gainC 1McGraw-Hill/IrwinSlide 7McGraw-Hill/IrwinSlide 7LIMITATIONS OF INTERNAL CONTROLThe costs of internal controls must not exceed their benefits.CostsBenefitsC 1McGraw-Hill/IrwinSlide 8McGraw-Hill/IrwinSlide 8CONTROL OF CASHAn effective syst

8、em of internal control that protects cash and cash equivalents should meet three basic guidelines:Handling cashis separated from recordkeeping for cash.Cash receiptsare promptly deposited in a bank.Cash disbursements are made by check.C 2McGraw-Hill/IrwinSlide 9McGraw-Hill/IrwinSlide 9CASH, CASH EQU

9、IVALENTS,AND LIQUIDITYCashCurrency, coins and amounts on deposit in bank accounts, checking accounts, and some savings accounts. Also includes items such as customer checks, cashier checks, certified checks, and money orders.Cash EquivalentsShort-term, highly liquid investments that are:1. Readily c

10、onvertible to a known cash amount.2. Close to maturity date and not sensitive to interest rate changes.C 2McGraw-Hill/IrwinSlide 10McGraw-Hill/IrwinSlide 10LiquidityHow easily an asset can be converted into cashto be used to pay for services or obligations.CASH, CASH EQUIVALENTS,AND LIQUIDITYC 2McGr

11、aw-Hill/IrwinSlide 11McGraw-Hill/IrwinSlide 11CASH MANAGEMENTThe goals of cash management are twofold:1.Plan cash receipts to meet cash payments when due.2.Keep a minimum level of cash necessary to operate.Effective cash management involves applyingthe following cash management principles: Encourage

12、 collection of receivables. Delay payment of liabilities. Keep only necessary levels of assets. Plan expenditures. Invest excess cash.C 2McGraw-Hill/IrwinSlide 12McGraw-Hill/IrwinSlide 12CONTROL OF CASH RECEIPTS Over-the-Counter Cash Receipts Cash register with locked-in record of transactions. Comp

13、are cash register record with cash reported. Cash Receipts by Mail Two people open the mail.Money to cashiers office.List to accounting dept.Copy of list filed.P 1McGraw-Hill/IrwinSlide 13McGraw-Hill/IrwinSlide 13CASH OVER AND SHORTSometimes errors in making change are discovered from differences be

14、tween the cash in the cash register and the record of the amount of cash receipts. If a cash registers record shows $550 but the count of cash in the register is $555, we would prepare the following journal entry:P 1McGraw-Hill/IrwinSlide 14McGraw-Hill/IrwinSlide 14CONTROL OF CASH DISBURSEMENTS All

15、expenditures should be made by check. The only exception is for small payments from petty cash. Separate authorization for check signing and recordkeeping duties. Use a voucher system.P 1McGraw-Hill/IrwinSlide 15McGraw-Hill/IrwinSlide 15VOUCHER SYSTEM OF CONTROL A voucher system establishes procedur

16、es for: Verifying, approving and recording obligations for eventual cash disbursements. Issuing checks for payment of verified, approved and recorded obligations.P 1McGraw-Hill/IrwinSlide 16McGraw-Hill/IrwinSlide 16CashierAccountingReceivingSupplier (Vendor)PurchasingRequestingCashierAccounting, Req

17、uesting& PurchasingAccountingSupplier (Vendor)Purchasing andAccountingSupplier, Requesting, Receiving & AccountingCheckInvoice ApprovalReceiving ReportInvoicePurchase OrderPurchase RequisitionSenderReceiverVOUCHER SYSTEM OF CONTROLP 1McGraw-Hill/IrwinSlide 17McGraw-Hill/IrwinSlide 17PETTY CA

18、SH SYSTEM OF CONTROLSmall payments required in most companies for items such as postage, courier fees, repairs and supplies.P 2McGraw-Hill/IrwinSlide 18McGraw-Hill/IrwinSlide 18OPERATING A PETTY CASH FUNDPetty CashMay 1Petty cash400 Cash 400 P 2McGraw-Hill/IrwinSlide 19McGraw-Hill/IrwinSlide 19Petty

19、 CashOPERATING A PETTY CASH FUNDP 2McGraw-Hill/IrwinSlide 20McGraw-Hill/IrwinSlide 2043Stamps$43Courier$80A petty cash fund is used only for business expenses.OPERATING A PETTY CASH FUNDP 2McGraw-Hill/IrwinSlide 21McGraw-Hill/IrwinSlide 21OPERATING A PETTY CASH FUNDReceiptsPetty cash receipts with e

20、ither no signature or a forged signature usually indicate misuse of petty cash.43Stamps$43Courier$80P 2McGraw-Hill/IrwinSlide 22McGraw-Hill/IrwinSlide 22Receipts$123To reimbursepetty cash fundUse a CashOver and Shortaccount if needed.P 2OPERATING A PETTY CASH FUNDMcGraw-Hill/IrwinSlide 23McGraw-Hill

21、/IrwinSlide 23PETTY CASH EXAMPLE Tension Co. maintains a petty cash fund of $400. The following summary information was taken from petty cash vouchers for July: Travel Expenses $79.30Customer Business Lunches 93.42Express Mail Postage 55.00Miscellaneous Office Supplies 32.48 Lets look at replenishin

22、g the fund if the balance on July 31 was $137.80. P 2McGraw-Hill/IrwinSlide 24McGraw-Hill/IrwinSlide 24 What amount of cash will be required to replenish the petty cash fund?a.$260.20b.$262.20c.$139.80d.$137.80Lets prepare the journal entry toreplenish the petty cash fund.PETTY CASH EXAMPLEP 2McGraw

23、-Hill/IrwinSlide 25McGraw-Hill/IrwinSlide 25PETTY CASH EXAMPLEJournal entry to replenish petty cash fundP 2McGraw-Hill/IrwinSlide 26McGraw-Hill/IrwinSlide 26BANKING ACTIVITIES AS CONTROLSBank AccountsSignature CardsDeposit TicketsChecksElectronic Funds TransferBank StatementsC 3McGraw-Hill/IrwinSlid

24、e 27McGraw-Hill/IrwinSlide 27BANK STATEMENT Usually once a month, the bank sends each depositor a bank statement showing the activity in the account.*C 3McGraw-Hill/IrwinSlide 28McGraw-Hill/IrwinSlide 28BANK RECONCILIATIONGENERAL LEDGERAccount:CashAcct. No.102 Balance DateItemPRDebitCreditDR (CR)May

25、31 Balance2,481.18 Why are thebalances different?*A bank reconciliation is prepared periodically to explain the difference between cash reported on the bank statement and the cash balance on companys books.P 3McGraw-Hill/IrwinSlide 29McGraw-Hill/IrwinSlide 29RECONCILING ITEMSBank Statement Balance A

26、dd:Deposits in transit. Deduct:Outstanding Checks Add or Deduct:Bank errors.Book BalanceAdd: Collections made by the bank.Add: Interest earned on checking account.Deduct: Nonsufficient funds check (NSF).Deduct: Bank service charge.Add or Deduct: Book errors.P 3McGraw-Hill/IrwinSlide 30McGraw-Hill/Ir

27、winSlide 30BANK RECONCILIATIONTwo sections:1. Reconcile bank statement balance to the adjusted bank balance.2. Reconcile book balance to the adjusted book balance.The adjusted balances should be equal.P 3McGraw-Hill/IrwinSlide 31McGraw-Hill/IrwinSlide 31 Lets prepare a July 31 bank reconciliation st

28、atement for the Simmons Company. The July 31 bank statement indicated a balance of $9,610. The cash general ledger account on that date shows a balance of $7,430. Additional information necessary for the reconciliation is shown on the next screen. BANK RECONCILIATION EXAMPLEP 3McGraw-Hill/IrwinSlide

29、 32McGraw-Hill/IrwinSlide 321.Outstanding checks totaled $2,417.2.A $500 check mailed to the bank for deposit had not reached the bank at the statement date.3.The bank returned a customers NSF check for $225 received as payment on account receivable.4.The bank statement showed $30 interest earned during July.5.Check No. 781 for supplies expense cleared