BUS 251 Chapter Notes - Chapter 6: Subledger, General Ledger, Audit Trail
15 Mar 2016
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Cash and accounts receivable are a company"s most liquid assets. They provide the resources necessary to meet immediate short term inancial obligaions. Used to help assess liquidity but one needs to be aware of uncollecible accounts: doubful accounts or bad debts. Also includes cash equivalents: short maturity dates i. e. treasury bill. Cash is measured at its face value at the reporing date: value is assumed not to change. Policies and procedures established for handling and recording assets, speciically cash as it"s the most suscepible to thet. Assignment of responsibiliies: one person is responsible for each task. Separaion of duies: means everyone does a diferent job related to cash. Collusion is when two or more employees do a thet together. Cash transacion can also be electronic fund transfer. Independent veriicaion: one person checking the work of another. Audit trail: transacions can be traced back to source documents. Where possible duies should be separated as follows:
