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Introduction

In Lesson 6, you will learn about the company’s system of internal accounting controls. The internal accounting control system includes all policies and procedures intended to safeguard assets, safeguard accounting records, and ensure that the company follows all laws and regulations. You will specifically look at internal control procedures designed to safeguard cash and inventory. This lesson will also explain petty cash, month-end bank reconciliations, and common types of receivables. At the end of this lesson, you will learn different methods for handling uncollectible accounts receivable.

Lesson Objectives

After completing this lesson, you should be able to do the following things:

• describe the objectives of internal controls;
• apply internal controls to cash receipts, cash payments, and inventory;
• explain petty cash transactions;
• explain bank reconciliations;
• describe common types of receivables;
• apply the direct write-off method for uncollectibles;
• apply the allowance method for uncollectibles; and
• account for notes receivables and calculate interest due on receivables.

Lesson Readings & Activities

By the end of this lesson, make sure you have completed the readings and activities found in the Lesson 6 Course Schedule.