chapter8 - CHAPTER 8 Internal Control and Cash ACCT100...

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Chapter 8-1 CHAPTER 8 Internal Control and Cash ACCT100 Autumn 2011 Teresa Chu Chapter 8-2 Internal Control over Cash Receipts Cash includes: coins, currencies, checks, money orders, money on hand, deposit in bank, etc. Cash receipts include: cash sales, collections of accounts receivable, receipt of interest, rent and dividends, owner investment, bank loans, proceed from sale of non-current assets, etc. Review Illustration 8-5 (Page 346 in textbook) on how to apply the 6 internal control principles over cash receipts 2 major sources: (1) Over-the-counter receipts (2) Mail receipts
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Chapter 8-3 Over-the-Counter Receipts Place cash register near exit and amounts are clearly visible to customers Cash register tapes accumulate daily transactions and totals Chapter 8-4 Cashiers ring up sales on cash registers Supervisor 1. reads register totals 2. makes cash counts 3. prepares cash count sheets Over-the-Counter Receipts Head cashier prepares daily summary & deposit slips Cashier’s Department Sales Department Illustration 8-7
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Chapter 8-5 Mail Receipts 2 mail-receipt clerks open all mail receipts, prepare a list and endorse each check “For Deposit Only” List shows check issuer name, payment purpose and check amount Original list along with checks and remittance advices are sent to Cashier’s department (where together with over-the-counter receipts are included in daily cash summary and are deposited into bank) Copy of list is sent to Treasurer’s office (where total mail receipts are compared with daily cash summary) Chapter 8-6 Internal Control over Cash Disbursements Payment by checks are more effective than payment by cash 1. Voucher system Approval network by authorized individuals to
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chapter8 - CHAPTER 8 Internal Control and Cash ACCT100...

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