RSM219H1 Chapter Notes - Chapter 6: Bank Reconciliation, Cash Cash, Bank Statement
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RSM219H1 Full Course Notes
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Cash a(cid:374)d a(cid:272)(cid:272)ou(cid:374)ts re(cid:272)eiva(cid:271)le are a (cid:272)o(cid:373)pa(cid:374)y"s most liquid assets. These give companies the resources necessary to meet its immediate short-term financial obligations. They have to be presented separated on financial statements so users can see the liquidity. Includes the cash represented by the (cid:272)usto(cid:373)e(cid:396)"s cheques held by the company for deposit. Physical cash on hand for a company. Cash held of deposit in the co(cid:373)pa(cid:374)(cid:455)"s accounts at financial institutions. Cash equivalent: amounts that can easily be converted into known amounts of cash. Cash is always reported at its face value. Key elements of an effective internal control system: physical controls. These are designed to protect assets from theft, diversion, damage or destruction. Cash on hand should be securely stores in cash registers and safes. Locks, alarms and fencing: assignment of responsibilities. Most effective when only one person is responsible for each task: separation of duties.
