BUS 251 Chapter Notes - Chapter 6: Subledger, Bank Reconciliation, Bank Statement

• School: Simon Fraser University
• Department: Business Administration
• Course: BUS 251
• Professor: Susan Bubra

Document Summary

Cash & a/r most liquid, allow company to meet its immediate short-term financial obligations. Uncollectible accounts = never paid by customers. Cash held on deposit in company"s accounts at financial institutions. Cash equivalents = amounts easily converted to cash. Cash measured at face value at reporting date. If cash in foreign currencies, converted into cad using rate of exchange at the statement of financial position date. One of management"s key responsibilities = safeguard company"s assets. To do so, est sys of internal controls that are continually monitored. Key elements of effective internal control sys incl: physical controls. Premises & resources secure thru use of locks, alarms, fencing, etc. W/ cash, regular bank deposits should be made & any cash on hand should be securely stored in cash registers & safes: assignment of responsibilities. Control most effective when only 1 person responsible for each task. Easier to pinpoint person at fault: separation of duties.