Chapter 9 – Auditing the Expenditure Cycle Summary Purchases and Cash Disbursement Procedures Using Batch Processing Technology Many batch system functions are the same as those in a manual purchase system. The main difference is that the routine accounting tasks are automated. Data Processing Department: Step 1 – the purchasing process begins in the data processing department‚ where the inventory control function is performed. The revenue cycle (in retailing firms) or the conversion cycle
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UNION BUDGET ANALYSIS . State of the economy before Budget 2014-15 1. Inflation: India’s economy has witnessed low growth and high inflation scenario for 7 out of preceding quarters to March 2014. Non-food and fuel consumer price inflation has remained over 8% for the past two years‚ according to RBI’s assessment. The RBI wants the government to rein
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McDonald’s – Business Strategy in India Case Study Abstract This case study discusses how McDonald’s India managed to buck the trend in a struggling economy‚ its early years and business strategy to get more out of its stores in India. The case also briefly discusses how McDonald’s adapted to local culture in India‚ its localization and entry strategy‚ its strong supply chain and pricing strategy. Table of Contents 1. Introduction 2. McDonald’s entry into India 3. Exhibit I: McDonald’s
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of Internal Control to Cash Receipts ---Cash receipts may result from cash sales; collections on account from customers; the receipt of interest‚ rents‚ and dividends; investments by owners; bank loans; and proceeds from the sale of noncurrent assets. ---The following internal control principles explained earlier apply to cash receipts transactions as shown: Establishment of responsibility - Only designated personnel (cashiers) are authorized to handle cash receipts. Segregation
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to plan their work and work towards their plan‚ it also has both advantages as well shortcomings that can affect an organization’s progress. The main advantage of a budget is it compels management to think about the future‚ which is probably the most important feature of a budgetary planning and control system. By ensuring a budget is prepared‚ management is forced to look ahead. In addition‚ management‚ the strategic level as per say‚ is required to set out detailed plans for achieving the targets
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Cash Flows at Amazon.com Abstract: This instructional case illustrates how Amazon.com’s strategy has evolved over time and how these characteristics are reflected in the financial statements. A particular emphasis is placed on the cash flow statement. Students evaluate the cash flow statement and examine its articulation with the other financial statements. Students create a direct method cash flow statement in the year of Amazon.com’s initial public offering using the information available
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Budgets provide a means for planning the financial future and play a vital role for planning. Budgets simultaneously make managers construct and implement plans‚ contribute useful information for improved decision making‚ provide a standard to administer performance evaluation‚ and enhance organization and communication. An essential component of the budgeting system is control. Control periodically takes actual results and budgeted results and compares the two. It also allows for managers to
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Name #2 Date Case #82 Prairie Winds Pasta – Capital Budgeting Methods & Cash Flow Estimation Summary of Case Prairie Winds Pasta is experiencing a high demand for pasta from its customers. The customers demand delivery with in one week with a maximum allowance of 10 days. The facility is running at full capacity - 24 hours a day. Question 1 Define the term “incremental cash flow.” Since the project will be financed in part by debt‚ should the cash flow statement include
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Control of Cash Disbursements Control of cash disbursements is important for companies as most large thefts occur from payment of fictitious invoices. One key to controlling cash disbursements is to require all expenditures to be made by check. The only exception is small payments made from petty cash. Another key is to deny access to the accounting records to anyone other than the owner who has the authority to sign checks. A small business owner often signs checks and knows from personal contact
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1. Introduction Increasingly‚ we are seeing many firms from various industries allowing their customers to pay on credit. This action will inevitably have a direct implication on the financial statements of these firms‚ in terms of accounts receivables‚ allowance for bad debt and uncollectible debt expense. This is especially so when customers are unable to repay their debts. In this paper‚ we will examine the 2008 financial statement of four companies in the retail industry‚ namely
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