8 terms


Principle of Internal Control
Establish Responsibilities
Maintain adequate records
Insure assets and bond key employees
separate record keeping from Custody of assets
Divide responsibilities for related transactions
Apply Technological controls
Perform regular and independent reviews
Petty Cash System
for small expenditure insist
set aside small amount of cash in a box or set up a separate checking account
Journal Entries to Replenish Petty Cash Account
Assume $70 in PCA
Postage Exp 15
Supply Exp 10
Misc Exp 05
Cash 30
Cash Over and Short
30 Receipts but 65 in box - have $35 to reach
Postage Exp 15
Supply Exp 10
Misc Exp 5
Cash Over/Short 5
Cash 35
Bank Reconciliation
Reconciles Balance per books to Balance per Bank Statement
Book Balances
MINUS: Bank Service Charge, Payment made by bank, errors by company
ADD: Collection Received by Bank, NSF Checks, Bank Book Errors
Bank Statement
MINUS: Outstanding Checks, Book Errors
ADD: Deposit in transit, Bank Errors
Cash Discounts
Recorded as Gross 0 as if discount isn't going to be taken
NET: Perpetual - assume discount WILL BE TAKEN