Accounting: Tools for Business Decision Making, 5th Edition

Published by Wiley
ISBN 10: 1118128168
ISBN 13: 978-1-11812-816-9

Chapter 7 - Fraud, Internal Control, and Cash - Questions: 28

Answer

(a) The activities pertaining to petty cash are - 1) Establishing the fund 2) Making payments from the fund 3) Replenishing the fund. (b) Journal entries are required in the operation of a petty cash fund

Work Step by Step

a) Internal control over a petty cash fund is applicable by having a supervisor to count the fund to ascertain whether the paid vouchers and fund cash equal the designated amount. He should also cancel or mutilate the paid vouchers so that they cannot be resubmitted for reimbursement. b) Establishing the Petty cash fund Replenishing the Petty cash fund
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