chapter 8-1 chapter 8 internal control and cash الرقابة الداخلية على النقد...

Chapter 8-1

CHAPTER CHAPTER 88

INTERNAL CONTROLINTERNAL CONTROLAND CASHAND CASH

النقد على الداخلية النقد الرقابة على الداخلية الرقابة

Accounting Principles, Eighth Edition

Chapter 8-2

Methods and measures adopted to:

1. Safeguard assets. االصول حماية

2. Enhance accuracy and reliability of accounting records. Reduce risk of: المحاسبية السجالت على االعتماد ومدى الدقة تعزيز

a. Errors (unintentional) المقصودة غير االخطاء مخاطر تقليل

b. Irregularities (intentional) المقصودة االخطاء او

Internal ControlInternal ControlInternal ControlInternal Control

LO 1 Define internal control.LO 1 Define internal control.

Chapter 8-3

Companies must

develop principles of control over financial reporting.

المالية التقارير على الداخلية الرقابة مبادئ تطوير

continually verify that controls are working.

بشكل يعمل الرقابة نظام ان من باستمرار جيد التحقق


LO 1 Define internal control.LO 1 Define internal control.

The Sarbanes-Oxley ActThe Sarbanes-Oxley Act

عام استحداثة تم الداخلية الرقابة بتعزيز متعلق القانون عام هذا استحداثة تم الداخلية الرقابة بتعزيز متعلق القانون 20052005هذا

من الكثير بانهيار تسببت والتي المحاسبية الفضائح من سلسلة من بعد الكثير بانهيار تسببت والتي المحاسبية الفضائح من سلسلة بعدالكبرى االمريكية الكبرى الشركات االمريكية الشركات

Independent auditors must attest to the level of internal control. الداخلية الرقابة مستوى يفحصوا أي يصادقوا ان يجب المستقلون المدققون

SOX created the Public Company Accounting Oversight Board (PCAOB).

Chapter 8-4

Measures vary with

size and nature of the business.

عملها وطبيعة الشركة حجم

management’s control philosophy.

الرقابة في االدارة فلسفة


LO 2 Identify the principles of internal control.LO 2 Identify the principles of internal control.

Principles of Internal Control Principles of Internal Control الرقابة الرقابة مبادئ مبادئالداخليةالداخلية

Illustration 8-1

Chapter 8-5



Principles of Internal ControlPrinciples of Internal Control

PHYSICAL, MECHANICAL, AND ELECTRONIC CONTROLS

Physical

حسي واقعي

Mechanical and

Electronic

ألي والكتروني

Illustration 8-3

Chapter 8-6



Principles of Internal ControlPrinciples of Internal Control

INDEPENDENT INTERNAL VERIFICATION

1. Records periodically verified by an employee who is independent.

2. Discrepancies reported to management.

OTHER CONTROLS

1. Bond employees. موظفين كفالة

2. Rotate employees’ duties and require vacations. تدويراالعمال على الموظفين

3. Conduct background checks. المرتجع التفتيش اجراء

Chapter 8-7

Cash ControlsCash ControlsCash ControlsCash Controls

Internal Control over Cash Internal Control over Cash ReceiptsReceipts

LO 3 Explain the applications of internal control principles to cash LO 3 Explain the applications of internal control principles to cash receipts.receipts.

Independent Internal

Verification

Supervisors count cash receipts daily; treasurer compares

total receipts to bank deposits daily

Establishment of Responsibility

Only designated personnel are

authorized to handle cash receipts

(cashiers)

Segregation of Duties

Different individuals receive cash, record cash receipts, and

hold the cash

Documentation Procedures

Use remittance advice (mail

receipts), cash register tapes, and

deposit slips

Physical, Mechanical, and

Electronic Controls

Store cash in safes and bank vaults; limit access to

storage areas; use cash registers

Other Controls

Bond personnel who handle cash; require employees to take

vacations; deposit all cash in bank daily

Illustration 8-5

Chapter 8-8


Cash consists of coins, currency, checks, money orders, and money on hand or on deposit in a bank.

او اليد تحت واألموال البريدية واألوامر والشيكات والورقية المعدنية العمالت من يتألف النقد

لدى البنك المودعة

Cash receipts come from:

cash sales نقدية مبيعات

collections on account from customers

العمالء من النقدية المتحصالت

receipt of interest, rent, and dividends

االسهم وأرباح واإليجار الفوائد مقبوضات

investments by owners المالكين قبل من االستثمارات

bank loans البنكيه القروض

proceeds from the sale of noncurrent assets

المتداولة غير االصول بيع عملية من LO 3 Explain the applications of internal control principles to cash LO 3 Explain the applications of internal control principles to cashالمتحصلreceipts.receipts.

Chapter 8-9

Mail ReceiptsMail ReceiptsMail ReceiptsMail Receipts

Control Procedures: الرقابة اجراءات

Mail receipts should be opened by two people, a list prepared, and each check endorsed.

, , والشكات قائمة وإعداد موظفان قبل من يفتح ان يجب المقبوظات بريدالمصادقة

Copy of the list, along with the checks and remittance advices, sent to cashier’s department.

, الصندوق دائرة ترسل والتحويالت الشكات مع القائمة من نسخة

Cashier adds the checks to the over-the-counter receipts and prepares a daily cash summary and makes the daily bank deposit.

, اليومي النقدية ملخص تعد الصندوق دائرة

Copy of list sent to treasurer’s office for comparison with total shown on daily cash summary.

باإلجمالي , للمقارنة الخزينة مدير مكتب الى ترسل القائمة من نسخةاليومي النقدية ملخص في الظاهر

LO 3 Explain the applications of internal control principles to cash LO 3 Explain the applications of internal control principles to cash receipts.receipts.

Chapter 8-10

Generally, internal control over cash disbursements is more effective when companies pay by check, rather than by cash.

Applications:

Voucher system

Electronic funds transfers (EFT) system

Petty cash fund


LO 4 Explain the applications of internal LO 4 Explain the applications of internal control principles to cash control principles to cash disbursements.disbursements.

Internal Control over Cash Internal Control over Cash DisbursementsDisbursements

Chapter 8-11


Internal Control over Cash Internal Control over Cash DisbursementsDisbursements Independent

Internal Verification

Compare checks to invoices; reconcile

bank statement monthly

Establishment of Responsibility

Only designated personnel are

authorized to sign checks (treasurer)

Segregation of Duties

Different individuals approve and make payments; check

signers do not record disbursements

Documentation Procedures

Use prenumbered checks and account

for them in sequence; each

check must have an approved

invoice

Physical, Mechanical, and

Electronic Controls

Store blank checks in safes, with limited access; print check

amounts by machine in indelible ink

Other Controls

Stamp invoices

PAID

LO 4 Explain the applications of internal LO 4 Explain the applications of internal control principles to cash control principles to cash disbursements.disbursements.

Illustration 8-8

Chapter 8-12

Petty Cash Fund - Used to pay small amounts.

Involves: النثرية المصاريف المقادير يستخدمصندوق لدفعالقليلة

1. establishing the fund, الصندوق تأسيس

2. making payments from the fund, and يتم الدفعخالله من

3. replenishing the fund. الصندوق تزويد اعادة


Internal Control over Cash Internal Control over Cash DisbursementsDisbursements

LO 5 Describe the operation of a petty cash fund.LO 5 Describe the operation of a petty cash fund.

Chapter 8-13

E8-8 Lincolnville Company uses a petty cash system. The fund was established on March 1 with a balance of $100. During March the following petty cash receipts were found in the petty cash box.

الصندوق في وجدت التالية الوصوالت الشهر خالل

March 5 Stamp inventory طوابع $39

March 7 Freight-out للخارج بضاعة نقل مصاريف 21

March 9 Miscellaneous expense متفرقة 6 مصاريف

March 11 Travel expense نقل 24 مصاريف

March 14 Miscellaneous expense 5

The fund was replenished تزويده on March 15 when the fundأعيدcontained $3 in cash على يحتوي الصندوق كان فقط 3عندما دوالر . On March 20, the amount in the fund was increased to $150.

Instructions: Journalize the entries in March that pertain to the operation of the petty cash fund.



Chapter 8-14

E8-8E8-8 The fund was established on March 1 with a balance of $100.

Petty cash 100March 1

Cash100



E8-8 E8-8 The fund was replenished on March 15 when the fund contained $3 in cash.

Postage expense 39

Freight-out 21

Miscellaneous expense 11

Travel expense 24

Cash over and short 2

Cash97

March 15

Chapter 8-15

E8-8 E8-8 On March 20, the amount in the fund was increased to $150.



Petty cash 50March 20

Cash50

Chapter 8-16

Contributes to good internal control over cash.

النقد على الداخلية الرقابة تعزيز في تساهم

Minimizes the amount of currency on hand.

اليد تحت االموال حجم من تقليل

Creates a double record of bank transactions.

في واألخر الشركة في واحد للنقدية سجلين خلقالبنك

Bank reconciliation. البنك تسوية مذكرة اعداد

Use of a BankUse of a BankUse of a BankUse of a Bank

LO 6 Indicate the control features of a bank account.LO 6 Indicate the control features of a bank account.

Chapter 8-17

Making Bank Deposits

البنك لدى االيداع

Authorized employee should make deposit.



Bank Code

Numbers

Front Side Reverse Side

Illustration 8-10

Chapter 8-18

Writing Checks الشيكات تحريرWritten order signed by depositor directing bank to pay a specified sum of money to a designated recipient.



Maker

الشيك محرر

Payee

لة المدفوع

Illustration 8-11

Payer

الدافع ) البنك)

Chapter 8-19

Bank Statements

Debit Memorandum اشعارمدين

Bank service charge

البنك خدمات خصمNSF (not sufficient funds)

شكات ) كافي غير الرصيدمرتجعة(



Illustration 8-12

Credit Memorandum اشعاردائن

Collect notes receivable.

القبض اوراق تحصيل

Interest earned. ايرادفائدة

Chapter 8-20

Reconciling the Bank Account تسويةالبنك حساب


LO 7 Prepare a bank reconciliation.LO 7 Prepare a bank reconciliation.

Reconcile balance per books and balance per bank to their adjusted (corrected) cash balances.

القيمة على للحصول بالبنك والحساب الدفاتر في الحساب تسويةالنقدية لرصيد الصحيحة

Reconciling Items:

1. Deposits in transit. الوارد الكشف في تظهر لم الطريق في ايداعاتالبنك من

) البنك ) الى ارسلت شيكات وهي التحصيل برسم شيكات ايضا وتسمىمن للتحصيل

1. Outstanding checks. , لم لكن للعمالء سلمت متداولة شيكاتالبنك من تصرف

2. Errors. اخطاء

3. Bank memoranda. البنك اشعارات

Chapter 8-21

Reconciliation Procedures



+ Deposit in Transit

- Outstanding Checks

+- Bank Errors

+ Notes collected by bank

- NSF (bounced) checks

- Check printing or other service charges

+- Book Errors

CORRECT BALANCE CORRECT BALANCE

Illustration 8-13

Chapter 8-22

E8-11E8-11 The following information pertains to Family Video Company.

1. Cash balance per bank, July 31, $7,263.

2. Cash balance per books, July 31, $7,284.

3. July bank service charge not recorded by the depositor $28.

4. Deposits in transit, July 31, $1,500.

5. Bank collected $900 note for Family in July, plus interest $36, less fee $20.The collection has not been recorded by Family, and no interest has been accrued.

6. Outstanding checks, July 31, $591.

Instructions

a) Prepare a bank reconciliation at July 31.

b) Journalize the adjusting entries at July 31 on the books of Family Video Company.



Chapter 8-23

E8-11 E8-11 a) Prepare a bank reconciliation at July 31.



Cash balance per bank statement $7,263

Add: Deposit in transit 1,500

Less: Outstanding checks (591)Adjusted cash balance per bank $8,172

Cash balance per books $7,284

Add: Collection of notes receivable 900

Collection of interest 36

Less: Bank service charge (28)

Note collection fee (20)

Adjusted cash balance per books $8,172

Chapter 8-24


July 31 Cash 28

Cash 916

Notes receivable 900

Interest revenue

36



E8-11 E8-11 b) Journalize the adjusting entries at July 31 on the books of Family Video Company.

Note: Note: Adjusting journal entry includes only the adjustments to the cash balance per books.

دفاتر في النقدية حساب بتسوية متعلقة فقط التسوية قيودالمشروع

Dr. Cr.


July 31

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