BANK AND OTHER RECONCILIATION STATEMENTS, PETTY CASH MANAGEMENT AND UNDERSTANDING FINANCIAL STATEMENTS

• Accounts that need to reconcile:
  i. Every Bank Account
  ii. Every intercompany and related companies account
  iii. Major Creditors account
  
• Process of preparing the reconciliation statement
  i. Identified the difference between your record of their accounts and their record of your accounts – their statement of account.
  ii. Investigate the cause of the difference and then:
  ~` Adjust your records (books of account)
  ~ Inform the other party to correct their account if it is their mistake.
  
• Bank Reconciliation:
  i. Work out the adjusted cash book balance first
  ii. Then reconcile the difference.
  iii. Starting point – can be from your adjusted cash book balance or from bank statement balance.

PETTY CASH MANAGEMENT 

• Difference between Cash Book and Petty Cash Book.
  
• Imprest system of petty cash management
• Petty cash record maintenance and payment policy and procedures
  
• Petty cash transaction processing
  
• Petty Cash reimbursement – when and how?
  
• Posting of petty cash records to general ledger
  
• Petty cash control and monitoring against abuse and fraud.

READING AND UNDERSTANDING OF FINANCIAL STATEMENTS

• Minimum information to be shown in the Financial Statement:
  i. Statement of Profit and Loss
  ~ Expense classification – by function or by nature
  ~ How to identify by a layman
  ii. Other Comprehensive Income
  iii. Statement of Financial Position
  ~ Presentation – Current & Non-Current
  ~ Understand Biological Assets
  ~ Understand what is Right of Use Assets (RUA) from operating lease
  ~ Understand what is Deferred Tax Assets and Deferred Tax Liabilities
  iv. Statement of Cash Flow
  ~ Presentation – Direct or Indirect
  ~ How to identify.
  ~ Breakdown into from Operating, Investing and Financing Activities
  v. Statement of Change in Equity.
  
• Various Qualitative information that needs to be shown in the Financial Statement
• Understand the different Audit Opinions