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Unformatted text preview: The custodian keeps the receipts in the petty cash box until the fund is replenished . As a result, the sum of the petty cash receipts and money in the fund should equal the established total at all times. This means that management can make surprise counts at any time by an independent person, such as an internal auditor, to determine the correctness of the fund. The company does not make an accounting entry to record a payment at the time it is taken from petty cash. It is considered both inexpedient and unnecessary to do so. Instead, the company recognizes the accounting effects of each payment when the fund is replenished. Replenishing the Petty Cash Fund Helpful Hint Replenishing involves three internal control procedures: segregation of duties, documentation procedures, and independent internal verification....
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- Spring '11