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Cash and Internal Controls

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Presentation on theme: "Cash and Internal Controls"— Presentation transcript:

1 Cash and Internal Controls
Chapter 8 Exercises Cash and Internal Controls

2 Petty Cash Transactions
In-Class Exercise: Exercise No Page Petty Cash

3 Petty Cash Transactions
Exercise 8-5 Hawk Company establishes a $400 petty cash fund on September 9. On September 30, the fund shows $166 in cash along with receipts for the following expenditures. (1) transportation-in, $32 (2) postage expenses, $113 (3) miscellaneous expenses, $87 The petty cashier could not account for a $2 shortage in the fund. Hawk uses the perpetual system in accounting for merchandise inventory. Prepare the following: (1) the September 9 entry to establish the fund. (2) the September 30 entry to reimburse (replenish) the fund. (3) an October 1 entry to decrease the fund to $300.

4 Petty Cash Transactions

5 Petty Cash Transactions
End of Exercise

6 Bank Reconciliation In-Class Exercises: Exercise No. Page

7 Bank Reconciliation Exercise 8-9
Frederick Clinic deposits all cash receipts on the day when they are received and it makes all cash payment by check. At the close of business on June 30, 2011, its Cash account shows a $15,141 debit balance. Frederick Clinic’s June 30 bank statement shows $14,275 on deposit in the bank. Prepare a bank reconciliation for Frederick Clinic using the following information: a. Outstanding checks as of June 30 total $2,500. b. The June 30 bank statement included a $125 debit memorandum for bank services. c. Check No. 919, listed with the canceled checks, was correctly drawn for $645 in payment of a utility bill on June 15. Frederick Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $654. d. The June 30 cash receipts of $3,250 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement.

8 Bank Reconciliation

9 Bank Reconciliation In-Class Exercises: Exercise No. Page
Reconciliation Adjusting Entries

10 Bank Reconciliation

11 Bank Reconciliation End of Exercise

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