Internal Control: Internal controls are policies and procedures implemented by an organization to attain operational goals and maintain the integrity of accounting. Internal Control system has five integral components that together work an effective internal control. Principles of Internal Control: Principles of Internal Control are the ways to maintain proper internal controls in an organization. These principles are as follows: Establishing Responsibilities Maintaining Records Safeguards of assets Segregation of Duties Compulsory Employees Job Rotation Split-Related Party Responsibility Using the Technology for Controls Conducting timely Independent Reviews To identify: The documents prepared under a voucher system

Question

Want to see the full answer?

Answer 1

Question

Chapter 8, Problem 15QS

To determine

Concept Introduction:

Internal Control:

Internal controls are policies and procedures implemented by an organization to attain operational goals and maintain the integrity of accounting. Internal Control system has five integral components that together work an effective internal control.

Principles of Internal Control:

Principles of Internal Control are the ways to maintain proper internal controls in an organization. These principles are as follows:

Establishing Responsibilities

Maintaining Records

Safeguards of assets

Segregation of Duties

Compulsory Employees Job Rotation

Split-Related Party Responsibility

Using the Technology for Controls

Conducting timely Independent Reviews

To identify:

The documents prepared under a voucher system

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

The following annual account balances are from Armour Sports at December 31. a. What is the change in the number of days’ sales uncollected between Year 1 and Year 2? (Round the number of days to one decimal.) b. From the analysis in part a, is the company’s collection of receivables improving?

Task 2: Evaluate the company's efficiency in collecting its accounts receivable during the fiscal year ended 31 December 2021. Use the company's information from its annual reports: Receivables as of 31 December 2020 Receivables as of 31 December 2021 $4,468,392 $4,972,722 $45,349,943 Sales revenue for year ended 31 December 2021 1. Calculate the company's number of days of sales outstanding (DSO) for the fiscal year ended 31 December 2021. (Use the average receivables to calculate the ratio). Net = 2.37 = Accounting receivable: Average Day's sales in receivable = 154. 2. Interpret the calculated ratio. 3. Assume that the industry average DSO ratio is 60 days. Based on this information and the subject company's DSO ratio, critically evaluate the company's credit policy and its implications.

A. Assume that all sales are on account. If sales revenue was $18,000,000 and the average days in accounts receivable was 38 days for the last operating year, what would the average accounts receivable balance have been? a. $1,680,000 b. $1,500,000 c. $1,875,000 d. $18,000,000 B. If accounts receivable is projected to be $800,000 at the beginning of the next operating year and $1,100,000 at the end of the next operating year: would cash be generated by accounts receivable or needed to fund accounts receivable? And, by how much? a. $300,000 of cash needed to fund accounts receivable b. $1,100,000 of cash needed to fund accounts receivable c. $500,000 of cash needed to fund accounts receivable d. $300,000 of cash generated by accounts receivable