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Assignment: Task 1: The sisters would like to understand various concepts related to accounting generally and to their business specifically. For example, you realize that they are not familiar with internal control and accounting control systems so you decide to explain to them why it is so important to have these systems in a merchandising business and also to provide them with a brief rationale of their importance. You also provide them with an explanation of the fraud triangle. As far as their particular business is concerned, they want to better understand what, specifically, you have done for their company in terms of merchandising.
Write a memo to the sisters in which you provide explanations of internal control and accounting control systems and the fraud triangle. Be sure to explain, as well, the details of accounting for a merchandising business, including the following:
What subsidiary ledgers and special journals are and how they should be used
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What internal control is, the principles of internal control activities, and how these principles can be applied to cash receipts and disbursements.
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