quantities‚ prices‚ extensions and footing‚ and freight allowances and checked with customers’ orders? Yes. Accounts receivable clerk 13. Is there an overall check for errors in arithmetic accuracy of period sales data by a statistical or product-line analysis? Yes. Marketing vice president 14. Are periodic sales data reported directly to general ledger accounting independent of accounts receivable accounting? No.
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identified when the auditors were assessing control risk for the revenue and collection cycle. In the Apollo’s revenue and collection cycle‚ there were several control risks identified. Apollo Shoes only had an abbreviated accounting and control manual‚ which had not been kept up to date. Management and employees described accounting and control procedures informally under the heading of several transaction cycles. The auditors found sales transactions were not identified correctly and the types
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July 08‚ 2013 Joseph Oloyede Sales and Collection Cycle When engaged in auditing a public firm‚ such as Apollo Shoe Inc.‚ an auditor must determine when to trust in the company’s internal controls and when to ascertain auxiliary testing methods are obligatory to analyze control risks. The sales and collection cycle is rather a substantial fraction of the audit because this unique segment employs a multitude of documentation and
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However‚ the cash account in Horniman Horticulture balance sheet went down dramatically from 2002 to 2005. In 2005‚ the company only held 9.4 thousand dollar as cash. As a result‚ it seems that Horniman Horticulture might not have enough cash to pay for operating expenditure and the liquidity risk may be higher. It would affect the operating activities and profitability of the company negatively. Additionally‚ there was a continuous increase in accounts receivable and receivable days‚ respectively
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recorded as what? a. Debit to Revenue and Credit to Accounts Receivable b. Debit to Accounts Receivable and Credit to Revenue c. Debit to Accounts Payable and Credit to Revenue d. Debit to Cash and Credit to Revenue 7. It presents the original trial balance plus or minus the adjustments. a. Adjusted Trial Balance c. Unadjusted Balance Sheet b. Unadjusted Trial Balance d. Adjusted Income Statement 8. What cycle is
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Utilize working capital in managing firm activities • Describe the hedging principle of short-term debt • Calculate the cash conversion cycle • Understand the risk/return trade-off in managing working capital I. Background The business manager must continually be alert to changes in working capital accounts‚ the cause of these changes and the implications of these changes for the financial health of the company. One convenient and effective method to highlight
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Lecture 4 KTH February 8th 2013 WCM - Working Capital Management WCM – Working Capital Management Working Capital is the capital needed in order to finance the ongoing business Working capital is mainly tied up in Cash Inventory Accounts receivable Logistikutbildning The Aim of improving WCM is always increased Profitability Logistikutbildning Reducing working capital improves cash flow... ...giving direct results on the profit A successful WCM project is not only a “financial”
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inventory‚ and receivables. This chapter answers some Basic questions involving working capital management such as how much cash and inventory should be kept on hand? Will it be affect the liquidity of the firm to sell on credit or not? And how and from which sources the short term financing can be obtained? Therefore this chapter helps us in answering these questions by analyzing the various options available to a firm. The first important concept mentioned is Cash Conversion Cycle. the net number
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Transactions- quantifiable business events w/c can be expressed in terms of money. Exchange of values. ( What? *Books of Accounts (journals / ledgers) ( Where? *Chronologically & Systematically (accordance to procedures & established rules of acctg) ( How? 2. Classifying- similar & inter-related transactions of events *Account / Account Title- device used to classify *3 Broad Categories – Assets / Liabilities / Capital 3. Summarizing- preparation of financial statements
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company’s balance sheet includes both current and non-current assets. The current assets are defined as the total sum of: * Cash and cash equivalents – Cash in hand or cash at bank * Accounts receivables – Amount that is expected to be collected from the customers within the current accounting cycle * Inventory – Goods or material in-stock or under processing which can be sold and converted into cash * Marketable securities – Very liquid securities that can be converted into cash
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