Control Features - Control Features: Use of a Bank The use...

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Control Features: Use of a Bank The use of a bank contributes significantly to good internal control over cash. A company can safeguard its cash by using a bank as a depository and clearinghouse for checks received and checks written. The use of a bank minimizes the amount of currency that must be kept on hand. It also facilitates control of cash because a double record is maintained of all bank transactions one by the business and the other by the bank. The asset account Cash maintained by the company is the “flip-side” of the bank's liability account for that company . A bank reconciliation is the process of comparing the bank's balance with the company's balance, and explaining the differences to make them agree. Many companies have more than one bank account. For efficiency of operations and better control, national retailers like Wal-Mart and Target often have regional bank accounts. Similarly, a company such as ExxonMobil with more than 100,000 employees may have a payroll bank
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This note was uploaded on 11/06/2011 for the course ACCOUNTING ac 201 taught by Professor - during the Spring '11 term at Montgomery.

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Control Features - Control Features: Use of a Bank The use...

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