Ex. 174
Match the internal control principle below with the appropriate cash receipts procedure described.
a.Documentation procedures
b.Establishment of responsibility
c.Independent internal verification
d.Human resource controls
e.Physical controls
f.Segregation of duties
_____ 1.Only designated personnel are authorized to handle cash receipts.
_____ 2.Different individuals receive cash and record cash receipts.
_____ 3.Use remittance advice and cash register tapes.
_____ 4.Store cash in safes and bank vaults.
_____ 5.Treasurer compares total receipts to bank deposits daily.
_____ 6.Bonding of employees that handle cash.
Ex. 175
Match the internal control principle below with the appropriate cash disbursements procedure described.
a.Establishment of responsibility
b.Segregation of duties
c.Documentation procedures
d.Physical controls
e.Independent internal verification
f.Human resource controls
_____ 1.Compare checks to invoices.
_____ 2.Different individuals approve and make payments.
_____ 3.Print check amounts by machine with indelible ink.
_____ 4.Only designated personnel are authorized to sign checks.
_____ 5.Each check must have approved invoice.
_____ 6.Requiring employees to take vacations.
Ex. 176
The petty cash fund of $200 for Vernon Company appeared as follows on December 31, 2011:
Cash$91.60
Petty cash vouchers
Freight in$22.40
Postage40.00
Balloons for a special occasion18.00
Meals25.00
Instructions
1.Briefly describe when the petty cash fund should be replenished. Because there is cash on hand, is there a need to replenish the fund at year end on December 31? Explain.
2.Prepare in general journal form the entry to replenish the fund.
3.On December 31, the office manager gives instructions to increase the petty cash fund by $100. Make the appropriate journal entry.