Chapter 8, Problem 21Q

(a)

To determine

Internal Control:

Internal control can be defined as a process to ensure achievement of the objectives of an organization in operational effectiveness and efficiency, reliable financial reporting, and compliance with laws, regulations and policies. The internal controls are framed in an organization to eliminate the internal control deficiencies of the organization.

To determine: The three activities that pertain to a petty cash fund, and indicate an internal control principle applicable to each activity.

(b)

To determine

The time when journal entries are required in the operation of a petty cash fund.