Concepts Dump

Cash is the most vulnerable to theft and fraud. Therefore companies usually employ the following procedures to handle cash:

• Segregation of duties: Different people are responsible for handling cash, recording transactions, and reconciling the bank statements.
• Authorization: All cash transactions must be approved by a supervisor.
• Reconciliation: Bank accounts and cash accounts to be checked regularly.
• Physical control: Secure cash under strict control.
• Documentation: All cash transactions should be properly documented.

The point where the ownership of the goods is transferred from the seller to the buyer.

• FOB Destination - When arrived at destination
• FOB Shipping point - When left the origin

We usually declare our policy at the notes to the financial statements.

A contingent liability is a potential liability that arises from past events and about which a company cannot report with confidence.

A lump sum is a single payment made at a specific point in time.

Where $i$ is the interest rate and $n$ is the number of periods. $FV$ is the future value of the lump sum.

An annuity is a series of equal payments made at regular intervals.

Where $PMT$ is the payment per period, $n$ is the number of periods, and $i$ is the interest rate.

The ratio is the present value factor from the present value annuity tables.