ACC10008 Lecture Notes - Lecture 8: Cash Register, Internal Control, Bank Statement
Financial information systems summary notes: Lecture 8
Cash and control of cash
Importance of cash control
▪ cash is the asset most subject to theft it is essential to set up good internal control systems
for handling cash and recording cash transactions
▪ Recording of cash transactions needs to be accurate because the business needs to be able
to:
▪ Determine whether it is solvent
▪ Show sources and uses of cash
▪ Plan future cash needs
Control of cash
▪ 3 important principles:
– separation of responsibility for: handling cash and
custodianship of cash from maintenance of records
– banking daily takings intact
– all payments made by electronic transfer or cash
▪ Authorisation by designated personnel should always occur before payment
is made
Control of cash receipts
▪ cash receipts from cash sales
– Use of cash register
– Cashier not involved in other cash transactions
– Cashier or cash register supervisor have access to the accounting
records
▪ cash short and over
– cash shortage is recorded (as an expense) when daily sales are
recorded
Document Summary
Control of cash: 3 important principles: separation of responsibility for: handling cash and custodianship of cash from maintenance of records. All payments made by electronic transfer or cash: authorisation by designated personnel should always occur before payment is made. Control of cash receipts cash receipts from cash sales. Cashier not involved in other cash transactions. Cashier or cash register supervisor have access to the accounting records cash short and over cash shortage is recorded (as an expense) when daily sales are recorded. Internal control and cash receipts: establishment of responsibility. Designated persons only handle cash receipts: segregation of duties. Receipts, recording and holding cash receipts: documentation procedures. Use of mail receipts, cash register tapes/deposit slips sequentially numbered: physical mechanical and electronic controls. Use of cash registers, safes, direct deposits or eft. Daily cash counts by supervisor, comparison of receipts with bank deposits daily.
