The Text Discussed Four Common Coding Systems for AIS Documents

question 33

Essay

The text discussed four common coding systems for AIS documents, charts of accounts and other applications.It also discussed a few common internal controls associated with the steps in the accounting cycle.Can the use of block or hierarchical coding in the chart of accounts be considered a form of internal control? Justify your response.

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Definitions:

Note

A financial instrument acknowledging debt, with terms including interest rate and repayment schedule.

Short-Term Notes Receivable

Current assets representing written promises for amounts to be received within a short period, typically within a year.

Cash (Net) Realizable Value

Cash (net) realizable value is the estimated amount of cash that a company expects to collect from its receivables, net of any allowances for doubtful accounts.

Interest Receivable

The amount of interest that has been earned but not yet received in cash by the company, representing an asset on the balance sheet.