Financial And Managerial Accounting
15th Edition
ISBN: 9781337902663
Author: WARREN, Carl S.
Publisher: Cengage Learning,
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Question
Chapter 7, Problem 9DQ
(a)
To determine
State whether Incorporation K should implement controls over petty cash.
(b)
To determine
Explain the control procedures for petty cash fund.
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Students have asked these similar questions
Which of the following statements are true regarding the control of cash receipts and cash payments? One key to controlling cash payments is to require that no expenditures be made by check; instead, all expenditures should be made from petty cash.
Think about internal control over receivables collections. What task
must be delegated to a company's credit department in order to
protect its cash? What can a credit department employee do to harm
the organization if this task is performed by the credit department?
Which of the following statements is not a good internal control for petty cash.
a. The officer in charge of petty cash may have access to other company funds
b.Petty cash should be maintained on an imprest basis
c.All petty cash payment must be properly authorized by a responsible person and must be in accordance with laid down policies
d.Petty cash reimbursement should be made only after the petty cashier has properly accounted for all payments made during the period e.g. by supporting documents to duly authorized petty cash voucher
e.There should be a surprise cash count by an independent person e.g. the internal auditor.
Chapter 7 Solutions
Financial And Managerial Accounting
Ch. 7 - Prob. 1DQCh. 7 - Why should the employee who handles cash receipts...Ch. 7 - Prob. 3DQCh. 7 - Why should the responsibility for maintaining the...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Prob. 7DQCh. 7 - Prob. 8DQCh. 7 - Prob. 9DQCh. 7 - Prob. 10DQ
Ch. 7 - Prob. 1BECh. 7 - Prob. 2BECh. 7 - Prob. 3BECh. 7 - Prob. 4BECh. 7 - Prob. 5BECh. 7 - Sarbanes-Oxley internal control report Using...Ch. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Prob. 6ECh. 7 - Prob. 7ECh. 7 - Prob. 8ECh. 7 - Prob. 9ECh. 7 - Prob. 10ECh. 7 - Prob. 11ECh. 7 - Entry for cash sales; cash short The actual cash...Ch. 7 - Entry for cash sales; cash over The actual cash...Ch. 7 - Prob. 14ECh. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Prob. 17ECh. 7 - Prob. 18ECh. 7 - Prob. 19ECh. 7 - Prob. 20ECh. 7 - Prob. 21ECh. 7 - Prob. 22ECh. 7 - Prob. 23ECh. 7 - Prob. 24ECh. 7 - Prob. 1PACh. 7 - Prob. 2PACh. 7 - Prob. 3PACh. 7 - Prob. 4PACh. 7 - Prob. 5PACh. 7 - Prob. 1PBCh. 7 - Prob. 2PBCh. 7 - Prob. 3PBCh. 7 - Prob. 4PBCh. 7 - Prob. 5PBCh. 7 - Analyze and compare Amazon.com to Netflix...Ch. 7 - Analyze and compare J. C. Penney and Macys J. C....Ch. 7 - Prob. 3MADCh. 7 - Prob. 4MADCh. 7 - Analyze and compare Nike, lululemon, and Under...Ch. 7 - Ethics in Action Tehra Dactyl is an accountant for...Ch. 7 - Bank error During the preparation of the bank...Ch. 7 - Prob. 4TIFCh. 7 - Prob. 5TIF
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Consider internal control over receivables collections. What job must be withheld from a company’s credit department in order to safeguard its cash? If the credit department does perform this job, what can a credit department employee do to hurt the company?arrow_forward1. What is the purpose of internal controls? 2. What will happen if companies do not impose internal controls? 3. Think of possible controls over cash, receivables and inventories. Explainarrow_forwardThe following statements relate to cash. Which statement is false? Legally restricted compensating balances required by a bank should always be excluded from "cash and cash equivalent". Classification of a restricted cash balance as current or noncurrent should be not parallel to the classification of the related obligation for which the cash was restricted. The term cash can refer to demand credit instruments such as money order and bank drafts. The purpose of establishing a petty cash fund is to keep enough cash for small recurring operating expenses for a period of time.arrow_forward
- Answer the following questions about internal control over cash payments:1. Payment by check includes three controls over cash. What are they?2. Suppose a purchasing agent receives the goods that she purchases and also approves payment for those goods. How could a dishonest purchasing agent cheat the company? Howdo companies avoid this internal control weakness?arrow_forwardWhat feature(s) could SEI have installed in its cash receipts internal controls that would have been expected to prevent the cash receipts journal and recorded cash sales from reflecting more than the amount shown on the daily deposit slips?arrow_forwardWhat types of controls should be in place to make sure people in the office don't just take from petty cash (for their own personal use) whenever they feel like it? In your opinion, what is an appropriate amount to have in petty cash?arrow_forward
- What are the controls needed to secure the petty cash fund?arrow_forwardWhich of the following does not show good cash management regarding the controls over cash disbursements? Use a petty cash fund to make only small expenditures. Make all major disbursements by check. Combine the handling of receiving bills, writing checks, and signing checks to one person. Prepare bank reconciliations in a timely manner. All the above shows good cash management controls over cash disbursements. A. В. C. D. E.arrow_forwardAnswer the following questions to ponder: 1. What is the purpose of internal controls? 2. What will happen if companies do not impose internal controls? 3. Think of possible controls over cash, receivables and inventories. Explain.arrow_forward
- Which of the following generally would be considered good internal control of cash disbursements? a. Make all cash disbursements using cash rather than debit cards or credit cards. b. Set maximum purchase limits on debit cards and credit cards. c. The employee responsible for making cash disbursements should be in charge of cash receipts. d. The employee who authorizes payments should also prepare the check.arrow_forwardWhich of the following is a reason that businesses use bank accounts as part of their internal control measures. a.The bank records incoming checks as liabilities. b.Customer’s returned checks can be charged an NSF fee. c.Differences between the company balance and the bank balance will automatically indicate fraud. d.Bank accounts are an independent record of cash transactions.arrow_forwardIs it required to have only one petty cashier or should the company appoint more than one person to administer the fund? Why?arrow_forward
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