BUS 251 Chapter Notes - Chapter 6: Bank Reconciliation, Internal Control, Bank Statement
12 Dec 2014
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Cash, short-term investments, and accounts and notes receivable. Meets the definition of an asset because: it provides probable future value as it has purchasing power, whoever has the possession is the owner. Difficult to control in terms of its handling and recording. As a result, some forms of internal control procedures are needed: physical measures to protect cash from theft or loss (passwords, access cards, etc. , clear assignment of responsibilities. Only one person is responsible for each task: separation of duties the transaction in the accounting books, independent verification, proper documentation procedures, an effective record-keeping and reporting system. The person who handles cash should not be the one who records. In canada, cash is recorded at the face value on the balance sheet: bill would be recorded at on the balance sheet. The value of cash is assumed not to change, even if there is inflation or deflation.
