and stored data Part IV. Short Answer: Give short answer for the following questions on the answer sheet. (4points) 1. Write down the accounting cycle schematically. 2. What are the advantages and disadvantages of with E-cash? 3.What are the factors in the control environmental components of the internal controlling process? 4.Write down internal controlling activities? 5. What are the major features of the cash disbursement application system?

**1. Accounting Cycle Schematic:**<br /><br />[Identify Transactions] --> [Analyze Transactions] --> [Record in Journal] --> [Post to Ledger] --> [Unadjusted Trial Balance] --> [Adjusting Entries] --> [Adjusted Trial Balance] --> [Financial Statements (Income Statement, Balance Sheet, Statement of Cash Flows)] --> [Closing Entries] --> [Post-Closing Trial Balance] --> [Reversing Entries (Optional)]<br /><br /><br />**2. Advantages and Disadvantages of E-cash:**<br /><br />**Advantages:**<br />* **Convenience:** Transactions can be completed anytime, anywhere.<br />* **Speed:** Faster than traditional payment methods.<br />* **Lower transaction fees:** Potentially lower costs compared to credit cards.<br />* **Increased privacy:** Can offer greater anonymity than traditional systems.<br /><br />**Disadvantages:**<br />* **Security risks:** Susceptible to hacking and fraud.<br />* **Dependence on technology:** Requires internet access and compatible devices.<br />* **Limited acceptance:** Not universally accepted by all merchants.<br />* **Potential for loss:** If the device storing e-cash is lost or damaged, the funds may be irretrievable.<br /><br /><br />**3. Factors in the Control Environment Component of Internal Control:**<br /><br />* **Commitment to integrity and ethical values:** Setting the tone at the top.<br />* **Board of directors independence and oversight:** Active and independent board involvement.<br />* **Organizational structure:** Clear lines of authority and responsibility.<br />* **Commitment to competence:** Hiring and retaining qualified individuals.<br />* **Accountability:** Holding individuals responsible for their actions.<br /><br /><br />**4. Internal Control Activities:**<br /><br />* **Segregation of duties:** Dividing responsibilities to reduce the risk of fraud.<br />* **Physical controls:** Safeguarding assets through physical security measures (locks, alarms, etc.).<br />* **Authorization and approval:** Establishing procedures for authorizing transactions.<br />* **Documentation and records:** Maintaining adequate records to support transactions.<br />* **Independent checks and reconciliations:** Regularly verifying the accuracy of records.<br /><br /><br />**5. Major Features of a Cash Disbursement Application System:**<br /><br />* **Check writing:** Automated check printing and signing.<br />* **Electronic funds transfer (EFT):** Initiating electronic payments.<br />* **Vendor payment management:** Maintaining vendor information and payment history.<br />* **Purchase order matching:** Matching invoices to purchase orders and receiving reports.<br />* **Budgetary controls:** Integrating with the budgeting system to monitor spending.<br />* **Reporting and analysis:** Generating reports on cash disbursements and vendor activity.<br />