ACCTG 101 Lecture Notes - Lecture 10: Petty Cash, Bank Reconciliation, Bank Statement
Document Summary
Internal controls over cash payments: establishment of responsibility. Only designated personnel authorised to sign cheques: segregation of duties. Cheque signers do not record payments: documentation procedures. Use prenumbered cheques and account for them in sequence. Each cheque must have an approved invoice: physical, mechanical and electronic controls. Store blank cheques in safes with limited access: independent internal verification. Reconcile bank statements monthly: other controls. A petty cash fund is a cash fund to pay relatively small amounts but still maintain satisfactory control. Three steps: establishing the fund, making payments from the fund, replenishing the fund. Cheques paid and other debits charged against the account. Deposits and other credits made to the account. The bank statement and the depositor"s cash at bank account must be reconciled regularly. Bank statements also show direct debits, direct credits and transfers of funds between accounts. Balance per books and balance per bank must be reconciled to their adjusted or correct balances.
