Conceptual objectives:

1. Define internal control and identify its purpose and principles.
2. Define cash and cash equivalents and explain how to report them.

Analytical objectives:

1. Compute the days’ sales uncollected ratio and use it to assess liquidity.

Procedural objectives:

1. Apply internal control to cash receipts and disbursements.
2. Explain and record petty cash fund transactions.
3. Prepare a bank reconciliation.
4. Appendix 6A—Describe the use of documentation and verification to control cash disbursements.
5. Appendix 6B—Apply the net method to control purchase discounts.