Ch08 - 8 Fraud, Internal Control, and Cash Chapter STUDY...

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344 Chapter 8 Fraud, Internal Control, and Cash Scan Study Objectives a Read Feature Story a Read Preview a Read text and answer a p. 356 a p. 360 a p. 364 a p. 371 a Work Comprehensive p. 374 a Review Summary of Study Objectives a Answer Self-Study Questions a Complete Assignments a DO IT! After studying this chapter, you should be able to: 1 Define fraud and internal control. 2 Identify the principles of internal control activities. 3 Explain the applications of internal control principles to cash receipts. 4 Explain the applications of internal control principles to cash disbursements. 5 Describe the operation of a petty cash fund. 6 Indicate the control features of a bank account. 7 Prepare a bank reconciliation. 8 Explain the reporting of cash. The Navigator STUDY OBJECTIVES A The Navigator A Feature Story MINDING THE MONEY IN MOOSE JAW If you’re ever looking for a cappuccino in Moose Jaw, Saskatchewan, stop by Stephanie’s Gourmet Coffee and More , located on Main Street. Staff there serve, on average, 650 cups of coffee a day, including both regular and specialty coffees, not to mention soups, Italian sandwiches, and a wide assortment of gourmet cheesecakes. “We’ve got high school students who come here, and students from the community college,” says owner/manager Stephanie Mintenko, who has run the place since opening it in 1995. “We have customers who are retired, DO IT! PDF Watermark Remover DEMO : Purchase from to remove the watermark
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345 and others who are working people and have only 30 minutes for lunch. We have to be pretty quick.” That means that the cashiers have to be efficient. Like most businesses where purchases are low-cost and high-volume, cash control has to be simple. “We have an electronic cash register, but it’s not the fancy new kind where you just punch in the item,” explains Ms. Mintenko. “You have to punch in the prices.” The machine does keep track of sales in several categories, however. Cashiers punch a button to indicate whether each item is a beverage, a meal, or a charge for the cafe’s Internet connections. An internal tape in the machine keeps a record of all transactions; the customer receives a receipt only upon request. There is only one cash register. “Up to three of us might operate it on any given shift, including myself,” says Ms. Mintenko. She and her staff do two “cashouts” each day—one with the shift change at 5:00 p.m. and one when the shop closes at 10:00 p.m. At each cashout, they count the cash in the register drawer. That amount, minus the cash change carried forward (the float), should match the shift total on the register tape. If there’s a discrepancy, they do another count. Then, if necessary, “we go through the whole tape to find the mistake,” she explains. “It usually turns out to be someone who punched in $18 instead of $1.80, or something like that.” Ms. Mintenko sends all the cash tapes and float totals to a bookkeeper, who double-checks everything and provides regular reports. “We try to keep the accounting simple, so we can concentrate on making great coffee and food.”
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This note was uploaded on 01/30/2011 for the course ACT 240 taught by Professor Janson during the Summer '08 term at N. Michigan.

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Ch08 - 8 Fraud, Internal Control, and Cash Chapter STUDY...

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