Survey of Accounting (Accounting I)
8th Edition
ISBN: 9781305961883
Author: Carl Warren
Publisher: Cengage Learning
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Question
Chapter 5, Problem 16CDQ
To determine
(a)
Introduction:
A petty cash fund is a special fund operated by a petty cash custodian to pay relatively small amounts of cash expenses in business during a specific time-period which may be weekly or monthly. All expenses are paid from this fund and it is replenished when the cash in the fund reaches a minimum level.
If company A should implement controls over petty cash fund.
To determine
(b)
Introduction:
A petty cash fund is a special fund operated by a petty cash custodian to pay relatively small amounts of cash expenses in business during a specific time-period which may be weekly or monthly. All expenses are paid from this fund and it is replenished when the cash in the fund reaches a minimum level.
The measures that can be used to control petty cash fund.
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Students have asked these similar questions
Which 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.
The 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.
What 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?
Chapter 5 Solutions
Survey of Accounting (Accounting I)
Ch. 5 - Prob. 1SEQCh. 5 - Prob. 2SEQCh. 5 - Prob. 3SEQCh. 5 - Adjustments to the company’s records based on the...Ch. 5 - Prob. 5SEQCh. 5 - Prob. 1CDQCh. 5 - Prob. 2CDQCh. 5 - Prob. 3CDQCh. 5 - Prob. 4CDQCh. 5 - Prob. 5CDQ
Ch. 5 - Prob. 6CDQCh. 5 - Prob. 7CDQCh. 5 - Prob. 8CDQCh. 5 - Prob. 9CDQCh. 5 - Assume that Leslie Hunter, accounts payable clerk...Ch. 5 - Prob. 11CDQCh. 5 - The accounting clerk pays all obligations by...Ch. 5 - Prob. 13CDQCh. 5 - Prob. 14CDQCh. 5 - Do items reported as a credit memorandum on the...Ch. 5 - Prob. 16CDQCh. 5 - Prob. 17CDQCh. 5 - Prob. 5.1ECh. 5 - Prob. 5.2ECh. 5 - Prob. 5.3ECh. 5 - Prob. 5.4ECh. 5 - Prob. 5.5ECh. 5 - Prob. 5.6ECh. 5 - Prob. 5.7ECh. 5 - Prob. 5.8ECh. 5 - Prob. 5.9ECh. 5 - Prob. 5.10ECh. 5 - Prob. 5.11ECh. 5 - Prob. 5.12ECh. 5 - Prob. 5.13ECh. 5 - Prob. 5.14ECh. 5 - Prob. 5.15ECh. 5 - Prob. 5.16ECh. 5 - Prob. 5.17ECh. 5 - Prob. 5.18ECh. 5 - Prob. 5.19ECh. 5 - Entries for note collected by bank Accompanying a...Ch. 5 - Prob. 5.21ECh. 5 - Prob. 5.22ECh. 5 - Prob. 5.23ECh. 5 - Prob. 5.24ECh. 5 - Prob. 5.25ECh. 5 - Prob. 5.1PCh. 5 - Prob. 5.2.1PCh. 5 - Prob. 5.2.2PCh. 5 - Prob. 5.3.1PCh. 5 - Prob. 5.3.2PCh. 5 - Prob. 5.4.1PCh. 5 - Prob. 5.4.2PCh. 5 - Prob. 5.4.3PCh. 5 - Prob. 5.4.4PCh. 5 - Prob. 5.1.1MBACh. 5 - Prob. 5.1.2MBACh. 5 - Prob. 5.1.3MBACh. 5 - Prob. 5.1.4MBACh. 5 - Ratio of cash to monthly cash expenses AcelRx...Ch. 5 - Prob. 5.2.1MBACh. 5 - Prob. 5.2.2MBACh. 5 - Ratio of cash to monthly cash expenses Pacira...Ch. 5 - Ratio of cash to monthly cash expenses Pacira...Ch. 5 - Prob. 5.2.5MBACh. 5 - Prob. 5.3.1MBACh. 5 - Prob. 5.3.2MBACh. 5 - Prob. 5.3.3MBACh. 5 - Prob. 5.3.4MBACh. 5 - Prob. 5.3.5MBACh. 5 - Prob. 5.4.1MBACh. 5 - Prob. 5.4.2MBACh. 5 - Prob. 5.1CCh. 5 - Prob. 5.2CCh. 5 - Prob. 5.3CCh. 5 - Prob. 5.4CCh. 5 - Prob. 5.5.1CCh. 5 - Prob. 5.5.2CCh. 5 - Prob. 5.5.3CCh. 5 - Prob. 5.6C
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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
- Is it required to have only one petty cashier or should the company appoint more than one person to administer the fund? Why?arrow_forwardWhich 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.arrow_forwardAnswer 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_forward
- 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?arrow_forwardReview the following statements regarding a petty cash fund used in a business. Select the one that is correct. O A petty cash fund is controlled by top management. O The cashier of a fund will write checks for small payments like postage, supplies and deliveries, O Only the petty cashier is responsible for paying cash from the fund. OA check written against the fund is cashed when the fund is replenished.arrow_forwarda. Why would a business use a Petty Cash Fund? b. Describe the entry needed to establish a 50 Petty Cash Fund and an entry to reimburse the fund.arrow_forward
- 55. According to GAM for NGAs, the establishment of a petty cash fund Requires the approval of the head of the agency Requires the approval of the chief accountant Requires the approval of the office of the president Does not require any formal approval because petty cash funds are likely to be immaterialarrow_forwardEntity A maintains a petty cash fund. At any given point of time, the cash on hand and the petty cash vouchers must be equal to the ledger balance of the petty cash fund. If these are not equal, the difference is either shortage or overage. This system of handling petty cash fund is called Imprest system Fluctuating balance system Pretty cash system Imprest System According to GAM for NGAs, the establishment of a petty cash fund Requires the approval of the head of the agency Requires the approval of the chief accountant Requires the approval of the office of the president Does not require any formal approval because petty cash funds are likely to be immaterial The “loans Receivable account is most likely to be used in the books of accounts of which of the following government agencies? COA NIA BTr All of these Entity A, a government entity, purchases inventories. To record a purchase, Entity A would most likely debit the (a) Inventory account Purchases account Expenses…arrow_forwardWhich of the following procedures would weaken control over cash receipts that arrive through the mail? Multiple Choice After the mail is opened, a list (in triplicate) of the money received is prepared with a record of the sender's name, the amount, and an explanation of why the money is sent. The cashier deposits the money in the bank and the recordkeeper records the amounts received in the accounting records. For safety, only one person should open the mail, and that person should deposit the cash received in the bank at the end of each month. The bank reconciliation is prepared by a person who does not handle cash or record cash receipts. The employees handling the cash receipts are bonded.arrow_forward
- 57. Entity A maintains a petty cash fund. At any given point of time, the cash on hand and the petty cash vouchers must be equal to the ledger balance of the petty cash fund. If these are not equal, the difference is either shortage or overage. This system of handling petty cash fund is called Imprest system Fluctuating balance system Pretty cash system Imprest Systemarrow_forwardWhich of the following is NOT an example of an internal control system? Select one: a )Prenumber checks b)Maintain separate duties between cash handling and cash recording c)Keep petty cash locked up and under one person’s control D)Make weekly depositsarrow_forward11. Which of the following statements in relation to accounting for petty cash fund is false? Group of answer choices The creation of a petty cash fund requires a journal entry to reflect the transfer of fund out of the general cash account At any time, the sum of the cash in the petty cash fund and the total of petty cash vouchers should equal the amount for which the imprest petty cash fund was established Each disbursement from petty cash should be supported by a petty cash voucher With the establishment of an imprest petty cash fund, one person is given the authority and responsibility for issuing checks to cover minor disbursementsarrow_forward
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