ACC220_WK4_Appendix_B - Axia College Material Appendix B...

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Appendix B Cash Management Matrix Directions : Using the matrix, list how each of the principles of internal control works, and give an example for each. Next, list how each of the principles of cash management works, and give an example for each. Principles of Internal Control How it Works Example Establishment of responsibility Only designated personnel, such as cashiers, are authorized to handle cash receipts. The running of our local, family owned grocery and produce business is an appropriate example of internal control. Although family owned, the business operates much as the chain grocery stores. Segregation of duties Different individuals receive cash, record cash receipts, and hold the cash. Cashiers receive cash and checks from customers; those receipts are then turned over to the accounts receivable clerk; and, after being recorded, receipts are turned over to the head accountant. Documentation procedures Use remittance advice (mail receipts), cash register tapes, and deposit slips. All transaction backup (physical
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ACC220_WK4_Appendix_B - Axia College Material Appendix B...

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