to the accounting department for recording. ohe check. Tne paid Invoice is then
ID: 2569443 • Letter: T
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to the accounting department for recording. ohe check. Tne paid Invoice is then sent Blank checks are stored in a safe in the treasurer's office. The combination to the safe is known only by the treasurer and assistant treasurer. Each month, the bank statement is reconciled with the bank balance per books by the assistant chief accountant. All employees who handle or account for cash are bonded. Instructions Identify the internal control principles and their application to cash disb Office Supply Company. ursements of Bolz Forney Company maintains a petty cash fund for small expenditures. The follow- ing transactions occurred over a 2-month period July1 Established petty cash fund by writing a check on Scranton Bank for $200. the fund consisted of $4.00 in cash and the following petty cash receipts: freight-out $92.00, postage expense $42.40, entertainment expense $46.60, and miscellaneous expense $11.20. 15 Replenished the petty cash fund by writing a check for $196.00. On this date,Explanation / Answer
(a)
(b)
(c)
Petty cash fund system involves
(i). Recording all the small expenses paid by the person inchrge.
(ii). Verifivzction of the amounts paid by the voushers or bills supporting them.
(iii) periodic verification of the cash balance available with the peron incharge.
(iv) Replenishing the fund aftre reconciling the cash balance and the expenses supported by vouchers and bills.
Forney Company Journal entries to record pettycash transactions Date Accounts Debit Credit July.1 Pettycash 200.00 Bank 200.00 (To record establishing pettycash fund) July.15 Freight - out 96.00 Postage expense 42.40 entertainment expense 46.60 miscellaneous expense 11.20 Pettycash 196.00 Cash over and short 0.20 (To record expenses paid from pettycash) July.15 Pettycash 196 Bank 196 (To record replenishing pettycash) July.31 Freight - out 82.10 Chartibale contribution expese 45.00 Postage expense 25.50 miscellaneous expense 39.40 Pettycash 192.00 (To record expenses paid from pettycash) July.31 Pettycash 192.00 Bank 192.00 (To record replenishing pettycash) Aug.15 Freight - out 77.60 entertainment expense 43.00 Postage expense 33.00 miscellaneous expense 37.00 Cash over and short 3.60 Pettycash 187.00 (To record expenses paid from pettycash) Aug.15 Pettycash 187.00 Bank 187.00 (To record replenishing pettycash) Aug.16 Pettycash 100.00 Bank 100.00 (To record entry to check drawn to increase pettycash to $300) Aug.31 Postage expense 140.00 Travel expense 95.60 Freight - out 47.10 Cash over and short 1.30 Pettycash 284.00 (To record expenses paid from pettycash) Aug.31 Pettycash 284.00 Bank 284.00 (To record replenishing pettycash)Related Questions
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