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Prepaid and Regular Expenses

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How does prepaid expenses differ from regular expenses?

What are the seven objectives of internal controls for various business cycles, such as, revenue, purchasing, and payroll cycles?

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Solution Summary

How the prepaid expenses differ from regular expenses are determined. The seven objectives of internal controls fro various business cycles are determined.

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Meaning of Internal control:

An accounting procedure or system designed to promote efficiency or assure the implementation of a policy or safeguard assets or avoid fraud and error etc.

Definition of internal control:

Entire financial and other controls covering the organization, method, process and internal audit established by the administration in order to ensure that the activities
are carried out in an effective, economic and efficient manner in compliance with the purposes of the administration and determined policies and the legislation, the assets and resources are protected, accounting records are kept in an accurate and complete manner and financial and management information is produced in time and in a reliable manner.

Seven objectives of internal control:
1. To see that only valid transactions are ...

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