FINANCIAL STATEMENT CHECKLIST

INTRODUCTION

1. In order to produce accurate and meaningful financial statements and to maintain adequate internal controls, there are certain actions that must be performed by the RAM or delegate. Unless otherwise indicated, the actions are applicable to all entities and are required at every month end.

ACCRUALS

2. Accrual accounting recognizes the effect of transactions in the period in which they occur, and ensures a reasonable matching of the expense incurred in the process of generating revenue. The following accruals must be actioned at each month-end, unless otherwise specified:

   1. Payroll. When pay periods do not end on the same day as the fiscal month-end, payroll expenses must be accrued;

   2. Merchandise Received But Not Invoiced. Purchases Not Invoiced accounts must be updated each month to reflect only merchandise that has not been invoiced. The amounts to be accrued are based on packing or delivery slips.

   3. Concession Revenue. Concession revenue is accrued based on the monthly payment terms of the Concession agreement. The offsetting debit is to Accounts Receivable;

   4. Video Rentals (CANEX only). Payments to video suppliers are normally based on a fixed percentage of sales and should be accrued based on actual video rental revenue for that period. The offsetting credit is to an accrued liability;

   5. Stocktaking Costs. Any costs incurred for stocktakings should be charged to the period in which the stocktaking took place; and

   6. Credit/Debit Card Charges. The card fees charged for acceptance of credit cards and debit cards should be accrued at the time the related sales are recognized. The offsetting entry is a credit to the appropriate accounts receivable account (Visa, Mastercard, etc.).

   7. Bank Accrual (Year-end Only). Cheques created before year-end but not printed and distributed until after year-end should be accrued back to the bank. The offsetting credit will be to temporary SU account. This entry is to be reversed at the start of the new fiscal year.

   8. Severance Accrual (Year-end Only). In consultation with management, an accrual should be made for severance pay, related to employees on layoff lists, when there is certainty that severance will be paid. The offsetting credit will be to an accrued liability.

   9. Supplier Rebates (Year-end Only). Volume and other supplier rebates should be accrued for, if not received before year-end.

   10. Other Revenue and Expense Accruals. Any revenue or expense item that is considered material should be accrued when source documents have not been received at the end of an accounting period. Possible accruals include utilities expense and CBA interest revenue.

ACCOUNTS RECEIVABLE CREDIT BALANCES
AND ACCOUNTS PAYABLE DEBIT BALANCES (Year-end Only)

3. These balances should be temporarily moved for year-end purposes (except for GST which is to be reported as an accounts payable). For instance, credit balances in accounts receivable accounts should be temporarily reported under accounts payable. The balances should be moved back to accounts receivable once the year-end statements have been produced.

RECONCILIATION OF SUBLEDGERS TO THE GENERAL LEDGER ACCOUNTS

4. All subledgers are to be reconciled to the related general ledgers at the end of each accounting period. For year-end, the hard copy of subledgers in summary format (total per customer/supplier/fixed asset) is to be retained and filed with the GLLIST in summary format (closing balance as at year-end date) and with the trial balance. For month-end, the hard copy information may be further summarized (ie. Grand totals).

STATEMENT RECONCILIATIONS

5. Supplier statement reconciliations must be completed on a monthly basis. These supplier statements are to be filed in the supplier's file.

CANEX HQ (CENTRAL BILLING), STATEMENTOF ACCOUNT RECONCILIATION

6. The balance reported on CANEX HQ (Central Billing) statement of account must be reconciled to the balance of the Accounts Payable - CANEX HQ central billing account. A copy of this reconciliation (see Annex A) is to be sent to CANEX HQ on a monthly basis.