Melissa- Week 4 Checkpoint - Cash Management Matrix

Melissa- Week 4 Checkpoint - Cash Management Matrix - Axia...

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Axia College Material 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 Assign the responsibility of a task to one person. This way is something in wrong that person is held responsible. Tellers at a bank or credit union work out of their own cash box. Having multiple people working out of the same cash box you would never know who is responsible for missing funds. Segregation of duties The responsibility of related activities are assigned to different people and/or the responsibility of the record keeping of an asset should be assigned to some who does not have custody of that asset. Keeping record keeping separate from physical custody provides a basis for accountability of an access by not allowing the record Tellers in a bank or credit union have custody of cash they are responsible for giving cash to customers (withdrawals) and taking money from customers (deposits, loan payments, etc.). The accounting department is responsible for compiling the figures from the tellers daily activity and posting them to the general ledger, but do not have ACC 220
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keeper (accountant) to have custody of an asset or access to it. access to actual cash. Another example would be a company’s bank account. Yes the accounting department may have the responsibility of recording the cash transactions on a daily basis but does not have access to checks and are not signers on the bank account. One person posts payments of invoices other authorized expenses, another person is responsible for issuing the checks, and one to three other people are responsible for signing the checks. In this process you have three people assigned related duties to the handling of the bank account. The clerk responsible for posting authorized payments who does not have access to the checks or is a signer on the bank account, the clerk responsible for issuing the checks has access to the checks but does not have access to the bank account or the authorized payment vouchers, and lastly the ACC 220
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signor(s) on the bank account who have access to only the bank account they are not responsible or do not have the authority to authorize payment vouchers and do not have access to the checks. Documentation procedures
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This note was uploaded on 09/06/2010 for the course ACC 220 acc-220 taught by Professor Unknown during the Spring '10 term at University of Phoenix.

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Melissa- Week 4 Checkpoint - Cash Management Matrix - Axia...

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