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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

As the new bookkeeper for a small business, you find that several people access the Petty Cash Fund, usually without anyone leaving a written explanation of what the money was used for. The amount of cash does not match the recorded amount of the fund. Explain how operation of the Petty Cash Fund can be made more efficient to maintain an accurate accounting of how the money is used.

To determine

Explain the way in which the Petty Cash Fund can be operated to use more efficiently and accurately.

Explanation

Petty cash fund: Petty cash fund is a fund established to pay insignificant amounts like postage, office supplies, and lunches. In day-to-day life, it becomes difficult to use checks for daily expenses.

Methods to operate Petty Cash Fund to use cash more efficiently:

  • Authority and responsibility: Petty Cash Fund should be established by an authorized person making him responsible for the custody of cash fund. Management should provide safes and locks to keep the cash safe, which denies access to other employees...

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