PRACTICAL CASH AND BANK AUDIT (Test 1) Questions for practical cash and bank audit as follows: Question 1 ToP Trading Company used QuickBooks accounting system to prepare financial statements, and company customizes reports for internal purposes. Daily cash report (control cash receipt and cash payment, its bank and cash balance) is customized and printed from QuickBooks accounting system for financial
Continue reading PRACTICAL CASH AND BANK AUDIT Learning Objective I. INTRODUCTION II. TYPE OF AUDIT PROCEDURES III. ADJUSTING THE BANK LEDGER ACCOUNT AND BANK RECONCILIATION STATEMENT IV. AUDIT PROCEDURE FOR CASH AND BANK V. PRACTICAL DOCUMENTS FOR CASH AUDIT ……………………………………………………………………. I.INTRODUCTION In practice, cash in Company is the most important asset among other assets and liabilities, so company should have strong internal
Continue reading The following chapters about FAU Foundations in Audit :
Continue reading How to prepare post-closing trial balance (after closing trial balance): A post-closing trial balance is a trial balance which is prepared after closing all of the temporary accounts in the general ledger. The temporary accounts are as follows: Income statement accounts such as revenue, expense, gain, and loss accounts; Income summary accounts; Temporary balance sheet accounts such as the sole proprietor’s drawing account or the corporation’s dividend
Continue reading What is an adjusted trial balance? After we make any adjusted entries, we will prepare adjusted trial balance. An adjusted trial balance is listing of all the account titles and balances in the general ledger after the adjusting entries. The purpose of the adjusted trial balance is certain that the total amount of debit balances in the general ledger equals the total amount of credit balances. Adjusted trial
Continue reading How to Prepare Trial Balance for Accounting Cycle: After prepare general ledger, we will prepare trial balance. A trial balance is a bookkeeping worksheet that lists the balances in each general ledger account. The debit balances are listed in a column with the heading “Debit” and the credit balances are listed in another column with the heading “Credit.” Most trial
Continue reading How to Make Closing Entry for Accounting Cycle: There are temporary accounts such as income statement accounts, income summary accounts, drawing and dividend accounts, so well discuss more details as follows: Company will prepare closing entries for the temporary accounts (nominal accounts). Temporary accounts include all of the income statement accounts such as revenues, expenses, gains and losses. Temporary accounts that are not
Continue reading Inventory Management and Economic Ordering Quantity (EOQ): Inventory is current asset; inventories are purchased for sale or production for sale. Optimum level of inventory is good current asset management. 1. Types of Inventory Inventory is divided into 3 categories: Raw Materials Work in Progress (WIP) or Unfinished Goods Finished Goods 2. Associated Costs of Inventory There are 2 basic costs
Continue reading Optimum Level of Cash Management: Cash management is the business process of collecting and managing cash and using it for investing. It is a key component of ensuring a company’s financial stability and solvency. Company manages cash by making timely collections and disbursements, and investing any temporary surpluses of cash in marketable securities, so company will keep safety level in
Continue reading Short-Term and Long-Term Financing, Financing Method: Sources of finance are important for business operation. Two main types of financing business are short-term and long-term financing. Short-term financing Short-term financing is less expensive (low interest rate) for business but it is riskier than long-term financing. The advantages and disadvantages of short-term financing are as follows: Interest rates of short-term financing are
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