Review the Annual Reports for Pepsico, Inc. and the Coca-Cola Company in Appendixes a & B of Financial Accounting. Select Either Pepsico, Inc. or the Coca-Cola Company. in Your Estimation, the Company You Chose May Be Financially Healthier or Weaker.

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8 Internal Control and Cash Chapter STUDY OBJECTIVES After studying this chapter, you should be able to: 1 Define internal control. 2 Identify the principles of internal control. 3 Explain the applications of internal control principles to cash receipts. 4 Explain the applications of internal control principles to cash disbursements. 5 Describe the operation of a petty cash fund. 6 Indicate the control features of a bank account. 7 Prepare a bank reconciliation. 8 Explain the reporting of The Navigator cash. ✓ The Navigator Scan Study Objectives Read Feature Story Read Preview ■ ■ ■ Read text and answer Before You Go On ■ p. 347 ■ p. 351 ■ p. 355 ■ p. 362 ■ p. 365 ■ Work Demonstration Problem Review Summary of Study Objectives…show more content…
Internal Control and Cash Internal Control • The Sarbanes-Oxley Act • Principles • Limitations Cash Controls • Control over cash receipts • Control over cash disbursements • • • • Use of a Bank Making deposits Writing checks Bank statements Reconciling the bank account Reporting Cash • Cash equivalents • Restricted cash • Compensating balances ✓ INTERNAL CONTROL STUDY OBJECTIVE 1 Define internal control. The Navigator Could there be dishonest employees where you work? Unfortunately, sometimes the answer is yes. For example, in addition to the highly publicized frauds at Enron, WorldCom, Tyco, and Global Crossing, the financial press recently reported the following. A bookkeeper in a small company diverted $750,000 of bill payments to a personal bank account over a three-year period. A shipping clerk with 28 years of service shipped $125,000 of merchandise to himself. A computer operator embezzled $21 million from Wells Fargo Bank over a two-year period. A church treasurer “borrowed” $150,000 of church funds to finance a friend’s business dealings. These situations emphasize the need for organizations to have good systems of internal control. Internal control consists of all the related methods and measures adopted within an organization to: 1. Safeguard its assets from employee theft, robbery, and unauthorized use. 2. Enhance the accuracy and reliability of its accounting records. This is done by reducing the risk of errors

More about Review the Annual Reports for Pepsico, Inc. and the Coca-Cola Company in Appendixes a & B of Financial Accounting. Select Either Pepsico, Inc. or the Coca-Cola Company. in Your Estimation, the Company You Chose May Be Financially Healthier or Weaker.

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