Ch 4 ED 6

CHAPTER 4:
CASH AND INTERNAL CONTROLS
1
PART A
INTERNAL CONTROLS
2
Incorrect Financial Statements
Reasons:
– Errors—accidental errors in recording transactions or applying accounting
rules
– Fraud—a person intentionally deceives another person for personal gain or
to damage that person
• Occupational fraud: the use of one’s occupation for personal
enrichment through the deliberate misuse or misapplication of the
employer’s resources
Copyright ©2022 McGraw-Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill.
Opportunity — the situation
allows the fraud to occur.
Opportunity
Motivation — someone feels
the need to commit fraud,
such as the need for money.
Fraud
Rationalization — justification
for the deceptive act by the
Motivation Rationalization one committing the fraud.
Fraud Triangle 4-4

Internal Controls
 Internal controls attempt to eliminate the opportunity element of

fraud
 Internal controls represent plans to:
– Safeguard the company’s assets
– Improve the accuracy and reliability of accounting information
Accounting Scandals and Response by Congress
 Managers are entrusted with the resources of both the company’s

lenders and owners
 Managers act as stewards or caretakers of the company’s assets
 Some managers have shirked their ethical responsibilities
– Top executives misused or misreported the company’s funds
Accounting Fraud in U.S. History
Enron WorldCom
Avoided reporting Misclassified

billions in expenditures to overstate
debt and losses assets and profitability
Copyright ©2022 McGraw-Hill. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill. 4-7
Sarbanes-Oxley Act of 2002
 Passed by Congress
 Also known as the Public Company Accounting Reform and
Investor Protection Act of 2002
 Applies to all companies that are required to file financial
statements with the SEC
 Established guidelines related to:
– Internal control procedures
– Auditor-client relations
Major Provisions of the Sarbanes-Oxley Act of 2002
Oversight board The Public Company Accounting Oversight Board (PCAOB) has the authority to establish standards dealing
with auditing, quality control, ethics, independence, and other activities relating to the preparation of
audited financial reports. The board consists of five members who are appointed by the Securities and
Exchange Commission.
Corporate Corporate executives must personally certify the company’s financial statements and financial disclosures.
Severe financial penalties and the possibility of imprisonment are consequences of fraudulent
executive misstatement.
accountability
Nonaudit services It’s unlawful for the auditors of public companies to also perform certain nonaudit services, such as
investment advising, for their clients.
Retention of work Auditors of public companies must retain all work papers for seven years or face a prison term for willful
violation.
papers
Auditor rotation The lead auditor in charge of auditing a particular company (referred to as the audit partner) must rotate
off that company within five years and allow a new audit partner to take the lead.
Conflicts of Audit firms are not allowed to audit public companies whose chief executives worked for the audit firm
and participated in that company’s audit during the preceding year.
interest
Hiring of auditor Audit firms are hired by the audit committee of the board of directors of the company, not by company
management.
Internal control Section 404 of the act requires (a) that company management document and assess the effectiveness of all
internal control processes that could affect financial reporting and (b) that company auditors express an
opinion on whether management’s assessment of the effectiveness of internal control is fairly stated.
Smaller companies are exempt from requirement (b).
Key Point
The accounting scandals in the early 2000s prompted passage of the Sarbanes-
Oxley Act (SOX).
Among other stipulations, SOX sets forth a variety of guidelines related to

auditor-client relations and additional internal controls.
Section 404, in particular, requires company management and auditors to

document and assess the effectiveness of a company’s internal controls.
Methods for collection of relevant information and communication in a
timely manner, enabling people to carry out their responsibilities.
Continual monitoring of internal activities and
reporting of deficiencies is required.
Monitoring includes formal procedures for
reporting control deficiencies.
Monitoring
Control activities are the policies and
procedures that help ensure that management’s
directives are being carried out. These activities
Control Activities
include authorizations, reconciliations, and
separation of duties.
Risk assessment identifies and analyzes internal

and external risk factors that could prevent a
Risk Assessment
company’s objectives from being achieved.
The control environment sets the overall ethical

tone of the company with respect to internal
Control Environment control. It includes formal policies related to
management’s philosophy, assignment of
responsibilities, and organizational structure.
Components of Internal Control

4-11
Live Nation’s Discussion of Internal Controls Over Financial Reporting
LIVE NATION ENTERTAINMENT

Notes to the Financial Statement (excerpt)
Our management, including our Chief Executive Officer and Chief

Financial Officer, does not expect that our disclosure controls and
procedures or internal controls will prevent all possible errors and fraud.
Our disclosure controls and procedures are, however, designed to
provide reasonable assurance of achieving their objectives, and our
Chief Executive Officer and Chief Financial Officer have concluded that
our disclosure controls and procedures are effective at that reasonable
assurance level.
Components of Internal Control
• The overall attitudes and actions of management greatly

affect the control environment.
• Risk assessment includes careful consideration of internal
and external risk factors.
• Control activities include a variety of policies and
procedures used to protect a company’s assets.
• Monitoring of internal controls needs to occur on an
ongoing basis.
• Information and communication depend on the reliability
of the accounting information system itself.
Control Activities – Preventative Controls
• Separation of duties – A set of procedures intended to separate

employees’ duties for authorizing transactions, recording transactions,
and controlling the related assets.
• Physical controls – A set of procedures that ensure assets and accounting
records are kept safe.
• Proper authorization – A set of procedures designed to prevent improper
use of the company’s resources.
• Employee management – Providing employees with appropriate
guidance to ensure they have the knowledge necessary to carry out their
job duties.
• E-commerce controls – A set of procedures specifically designed to
ensure only authorized personnel are able to conduct e-commerce
transactions.
4-14
Control Activities – Detective Controls
• Reconciliations – Management should periodically determine

whether the amount of physical assets of the company (cash,
supplies, inventory, and other property) agree with the
accounting records.
• Performance reviews – The actual performance of individuals
or processes should be checked against their expected
performance.
• Audits – Hire an independent auditor to assess the internal
control procedures to detect any deficiencies or fraudulent
behavior of employees.
Responsibilities for Internal Control
 Top Executives:
– Everyone in a company has an impact on the operation
and effectiveness of internal controls.
– The top executives are the ones who must take final
responsibility for their establishment and success.
LIVE NATION ENTERTIANMENT
Auditor’s Report (excerpt)
We have audited Live Nation Entertainment, Inc.’s internal control over
financial reporting as of December 31, 2019, based on criteria
established in the Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(2013 framework) (the COSO criteria). In our opinion, Live Nation
Entertainment, Inc. (the Company) maintained, in all material respects,
effective internal control over financial reporting as of December 31,
2019, based on the COSO criteria.
Excerpt from Regal Entertainment’s Auditor’s Report Related to

Effectiveness of Internal Controls 4-17
Limitations of Internal Control
 Even with the best internal control systems, financial misstatements

can occur.
 Internal control systems are especially susceptible to collusion.
– Collusion: Two or more people acting in coordination to
circumvent internal controls
 Top-level employees who can override internal control procedures
also have opportunity to commit fraud.
 Effective internal controls and ethical employees alone cannot
ensure a company’s success, or even survival.
Key Point
Internal control refers to a company’s plan to improve the accuracy

and reliability of accounting information and safeguard the company’s
assets.
Five key components to an internal control system are (1) control

environment, (2) risk assessment, (3) control activities, (4)
monitoring, and (5) information and communication.
Control activities include those designed to prevent or detect

fraudulent or erroneous behavior.
PART B: CASH
20
Components of the Total Cash Balance
4-21
Key Point
Cash includes:
 Coins and currency, checks received, and balances in savings and
checking accounts,
 Credit card and debit card sales, and
 Cash equivalents, defined as investments that mature within three
months from the date of purchase (such as money market funds,
Treasury bills, and certificates of deposit).
Collections of Payments from Customers
 Cash and checks (“paper”)

 Credit cards and debit cards (“plastic”)
 Mobile payments
 Electronic funds transfers (EFTs)
 Prepaid cards
 Cryptocurrencies
Controls over Receipt of Cash and Checks
1. Open mail each day, and make a list of cash and checks received, including
the amount and payer’s name.
2. Designate an employee to deposit cash and checks into the company’s bank
account each day, different from the person who receives cash and checks.
3. Have another employee record cash receipts in the accounting records as
soon as possible. Verify cash receipts by comparing the bank deposit slip
with the accounting records.
4. Accept credit cards or debit cards, to limit the amount of cash employees
handle.
Acceptance of Credit Cards
 The acceptance of credit cards provides an additional control by

reducing employees’ need to directly handle cash.
 Meanwhile, the credit card company deposits cash in the
company’s bank for the amount of the sale, less service fees.
Record Credit Card Sales
• A movie theatre accepts MasterCard as payment for

$2,000 worth of movie tickets, and MasterCard
charges the movie theatre a service fee of 3%.
• The service fee equals $60, or sales of $2,000 times
3%.
Debit Credit
Cash ……………………………….……………………………. 1,940
Service Fee Expense ….………………………………... 60
Service Revenue………………………..………….. 2,000
(Sell tickets with credit card and 3% service fee)
Acceptance of Debit Cards
 Like credit cards, debit cards offer customers a way to purchase

goods and services without a physical exchange of cash.
 They differ, however, in that most debit cards (sometimes referred
to as check cards) work just like a check and withdraw funds
directly from the cardholder’s bank account at the time of use.
 Similar to credit cards, the use of debit cards by customers results
in a fee being charged to the retailer.
 However, the fees charged for debit cards are typically much lower
than those charged for credit cards.
Common Mistake
 The term debit card can cause some confusion for someone in the
first accounting course.
 Throughout this course, we refer to an increase in cash as a debit
to cash. However, using your debit card will result in a decrease in
your cash account.
 The term debit card refers to the bank’s liability to the company
being decreased (debited) when the company uses a debit card.
Don’t let this confuse you.
Controls Over Cash Disbursements (1 of 2)
1. Make all disbursements, other than very small ones, by check, debit
card, or credit card. This provides a permanent record of all
disbursements.
2. Authorize all expenditures before purchase and verify the accuracy of
the purchase itself. The employee who authorizes payment should not
also be the employee who prepares the check.
3. Make sure checks are serially numbered and signed only by authorized
employees. Require two signatures for larger checks.
Controls Over Cash Disbursements (2 of 2)
4. Periodically compare amounts shown in the debit card and credit card
statements with purchase receipts. The employee verifying the
accuracy of the debit card and credit card statements should not also
be the employee responsible for actual purchases.
5. Set maximum purchase limits on debit cards and credit cards. Give
approval to purchase above these amounts only to upper-level
employees.
6. Employees responsible for making cash disbursements should not also
be in charge of cash receipts.
Record Purchase of Advertising with Cash, Check or Debit Card
• A movie theatre pays $1,000 to advertise its show

times.
• The movie theatre pays with cash, a check, or a debit
card.
Debit Credit
Advertising Expense ….………………………………... 1,000
Cash …………………..……………………..………….. 1,000
(Purchase advertising with cash, check, or debit card)
Record Purchase of Advertising with Credit Card
• A movie theatre pays $1,000 to advertise its show times.

• The movie theatre pays with credit card
Debit Credit
Advertising Expense ….………………………………... 1,000
Accounts Payable ……………………..………….. 1,000
(Purchase advertising with credit card)
Key Point
 Because cash is the asset of a company most susceptible to

employee fraud, controls over cash receipts and cash
disbursements are an important part of a company’s overall internal
control system.
 Important controls over cash receipts include separation of duties
for those who handle cash and independent verification of cash
receipts.
 Important controls over cash disbursements include payment by
check, credit card, or debit card, separation of duties, and various
authorization and documentation procedures.
Bank Reconciliation
The balance of cash in the company’s records may not equal the balance of
cash in the bank’s records.
Bank's Cash Company's

Records Cash Records
Possible Possible
Differences Differences
1. Timing 1. Timing
2. Errors 2. Errors
• A bank reconciliation matches the balance of cash in the bank with the balance
of cash in the company’s own records.
• Timing differences in cash occur when the company records transactions before
or after the bank records the same transactions.
• Errors can be made either by the company or its bank and may be accidental or
intentional.
4-34
STARLIGHT PRODUCTIONS
Cash Account Records
March 1, 2024, to March 31, 2024
Cash Receipts Cash Disbursements
Date Description Amount Date Description Memo Amount
3/5 Sales $3,600 3/1 EFT Salaries $7,200
3/12 Sales 5,900 3/5 EFT Rent 4,500
3/16 Sales 4,200 3/10 DC Advertising 3,000
3/20 Sales 7,400 3/17 CHK 294 Supplies 2,700
3/24 Sales 6,300 3/23 DC Repairs 2,100
3/16 Sales 8,500 3/28 CHK 295 Insurance 5,400
$35,900 $24,900
Summary of Transactions
Beginning Ending
Cash Balance Cash Cash Cash Balance
March 1, 2024 + Receipts – Disbursements = March 31, 2024
$23,600 $35,900 $24,900 $34,600
Company Records of Cash Activities

35
4-35
P.O. Box 26788
Odessa, TX 79760 First Bank Member FDIC
(432) 799-BANK A Name You Can Trust
Account Holder: Starlight Productions Account Number: 4061009619
221B Baker Street Statement Date: March 31, 2024
Odessa, TX 79760
Account Summary
Beginning Balance Deposits and Credits Withdrawals and Debits Ending Balance
March 1, 2024 No. Total No. Total March 31, 2024
$23,600 4 $29,600 8 $26,800 $26,400
Account Details
Deposits and Credits Withdrawals and Debits
Date Amount Description Date Amount Description
3/8 $3,600 DEP 3/1 $7,200 EFT
3/14 5,900 DEP 3/5 4,500 EFT
3/19 4,200 DEP 3/10 3,300 DC
3/22 7,400 DEP 3/21 2,700 CHK 294
3/26 6,300 DEP 3/23 2,100 DC
3/29 2,000 NOTE 3/27 4,100 EFT
3/29 200 INT 3/31 2,800 NSF
3/31 100 SF
$29,600 $26,800
Desc. DEP Customer deposit INT Interest earned SF Service fees
NOTE Note collected CHK Customer check NSF Nonsufficient funds
EFT Electronic funds transfer DC Debit card
Bank Statement
4-36
Common Mistake
 Notice that bank statements refer to an increase (or deposit) in the cash balance as a
credit and a decrease (or withdrawal) as a debit. This terminology is the opposite of
that used in financial accounting, where debit refers to an increase in cash and credit
refers to a decrease in cash.
 The reason for the difference in terminology is a difference in perspective.
– When a company makes a deposit, it views this as an increase to cash, so it records a
debit to the Cash account. However, the bank views this same deposit as an increase in
the amount owed to the company, or a liability, which is recorded as a credit.
– Similarly, a withdrawal of cash from the bank is viewed by the company as a decrease to
its Cash account, so it is recorded with a credit, but the bank views this withdrawal as a
decrease to the amount owed to the company, so it debits its liability.
Reconciling the Bank Account
Reconciling the bank account involves the following three steps:

1. Reconcile the bank’s cash balance.
2. Reconcile the company’s cash balance.
3. Update the company’s Cash account by recording items identified
in step 2.
Step 1: Reconcile the Bank’s Cash Balance
 Cash transactions recorded by the company, but not yet recorded

by its bank:
– Deposits outstanding: Cash receipts of the company that have
not been added to the bank’s record of the company’s balance
– Checks outstanding: Checks the company has written that
have not been subtracted from the bank’s record of the
company’s balance
– Bank errors
Step 2: Reconcile the Company’s Cash Balance
• Cash transactions recorded by bank but not company

• Common items that will increase the company’s cash balance include:
– Bank collections on the company’s behalf
– Interest earned on average daily balance
 Common items that will decrease the company’s cash balance include:
– Electronic funds transfers (EFTs)
– NSF checks – customers’ checks written on “nonsufficient funds”
– Debit card purchases
– Bank service fees.
 Company errors
Company Records Bank Statement
Cash Receipts Deposits and Credits

Date Description Amount Date Amount Desc.
3/5 Sales $3,600 3/8 $3,600 DEP
3/12 Sales 5,900 3/14 5,900 DEP
3/16 Sales 4,200 3/19 4,200 DEP
3/20 Sales 7,400 3/22 7,400 DEP
3/24 Sales 6,300 3/26 6,300 DEP
3/30 Sales 8,500 3/29 2,000 NOTE
3/29 200 INT
Deposit Outstanding
not in bank statement
Cash increases
not in company records
Differences in Cash Collections 4-41

Company Records Bank Statement
Cash Disbursements Cash Disbursements
Date Desc. Memo Amount Date Amount Desc.
3/1 EFT Salaries $7,200 3/1 $7,200 EFT
3/5 EFT Rent 4,500 3/5 4,500 EFT
Company
3/10 DC Advertising 3,000 3/10 3,300 DC error of $300
3/17 CHK 294 Supplies 2,700 3/21 2,700 CHK 294
3/23 DC Repairs 2,100 3/23 2,100 DC
3/28 CHK 295 Insurance 5,400 3/27 4,100 EFT
3/31 2,800 NSF
Checks Outstanding 3/31 100 SF
not in bank statement
Cash decreases
not in company records
Differences in Cash Payments 4-42

STARLIGHT Productions
Bank Reconciliation
March 31, 2024
Bank's Cash Balance Company's Cash Balance
Per bank statement $26,400 Per general ledger $34,600
Note Received 2,000

Deposits outstanding: 8,500
Interest earned from note 200
EFT for utilities (4,100) Step 3:

Update
Checks outstanding: (5,400) NSF Check from customer (2,800)
company
Service fee (100) records
Corrected advertising expense (300)
Company balance per reconciliation $29,500
Bank balance per reconciliation $29,500

Step 1 Step 2
Reconciled
Bank Reconciliation 43
4-43
43
Common Mistake
 Students sometimes mistake an NSF check from a customer as a bad check

written by the company instead of one written to the company.
 When an NSF check occurs, the company has deposited a customer’s check
but the customer did not have enough funds to cover the check.
 The company must adjust its balance of cash downward to reverse the
increase in cash it recorded at the time of deposit.
 The effect of this bounced customer check creates an account receivable for
the company until the customer honors the funds it owes.
Step 3: Update the Company’s Cash Account (1 of 3)
Update the balance in the company’s Cash account to adjust for

items used to reconcile the company’s cash balance (right side of
Illustration 4-12).
 Debit Cash for items that add to the balance.
 Credit Cash for items that subtract from the balance.
Record items that increase cash:

March 31, 2024 Debit Credit
Cash ……………………………….……………………………. 2,200
Notes Receivable…………………………………... 2,000
Interest Receivable (from note)…………….. 200
(Record collection on note and interest earned)
Record items that decrease cash:

March 31, 2024 Debit Credit
Utilities Expense……..………………………………… 4,100
Accounts Receivable…………………………………… 2,800
Service Fee Expense …………………………………… 100
Advertising Expense …………………………………… 300
Cash ………………………………………………………… 7,300
(Record utilities payment, NSF check, advertising, bank service fee,
and correction for advertising)
 In the uncommon event that the two balances at the end of the
bank reconciliation schedule are not equal, management
investigates the discrepancy to check for wrongdoing or errors by
company employees or the bank.
 If the company cannot resolve the discrepancy, it records the
difference to either Miscellaneous Expense or Miscellaneous
Revenue, depending on whether it has a debit or credit balance.
Common Mistake
 Some students try to update the Cash account for deposits

outstanding, checks outstanding, or a bank error.
 The company does not need to adjust for these items related to
reconciling the bank’s balance because they are already properly
recorded in the company’s accounting records.
Summary of Items Included in the Bank Reconciliation
Bank’s Company’s
Cash Balance Cash Balance
Per bank statement Per general ledger
Timing + Deposits outstanding + Notes received by bank

Differences − Checks outstanding + Interest received
− Unrecorded payments
− NSF checks from customers
− Bank service fees
± Bank errors ± Company errors

Errors = Bank balance per reconciliation = Company balance per reconciliation
49
Copyright ©2022 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. 4-49
49
Key Point
 In a bank reconciliation we reconcile the bank’s cash balance for:

 Cash transactions already recorded by the company but not yet recorded by the
bank and
 Bank errors.
 Similarly, we reconcile the company’s cash balance for:
 Cash transactions already recorded by the bank but not yet recorded by the
company and
 Company errors.
 After we complete the reconciliations, the amounts for the bank balance and the
company balance should be equal.
 Any adjustments to the company’s balance need to be recorded.
Employee Purchases
 Petty cash fund: small amount of cash kept on hand to pay for minor
purchases
– Accounting for the petty cash fund involves:
• Establishing the fund
• Recognizing expenditures from the fund
• Replenishing the fund
 Company-issued debit and credit cards
– Debit cards (and checks) captured in the bank reconciliation
– Credit card purchases need to be recorded
Establish a Petty Cash Fund
 Establish a petty cash fund of $200.

 Remove cash from the bank and place it on hand at the
company.
May 1 Debit Credit

Petty Cash (on hand) …………..………………… 200
Cash (checking account) …………………….. 200
(Establish the petty cash fund)
Employee Purchases
Petty Cash Fund Purchasing Manager Marketing Manager

(Cash) (Credit Card) (Credit Card)
Item Amount Item Amount Item Amount
Lunch $60 Supplies $800 Advertising $1,500
Delivery $90 Supplies $600 Postage $1,200
May 31 Debit Credit

Supplies ($800 + $600) ……………………………………….. 1,400
Advertising Expense ……………………………………………. 1,500
Postage Expense …………………………………………….…… 1,200
Accounts Payable ……………………………………….. 4,100
(Recognize employee expenditures with credit cards)
May 31 Debit Credit

Entertainment Expense……………………………………….. 60
Delivery Expense …………………………………………….…… 90
Cash…………………………………………………………… 150
(Recognize employee expenditures from the petty cash fund)
Key Point
 To make purchases on behalf of the company, some employees are

allowed to use debit cards and credit cards (purchase cards), write checks,
and spend available cash on hand (petty cash fund).
 At the end of the period, all employee purchases are recorded, and the
petty cash fund is replenished.
Internal Controls over Employee Expenditures
 Employees should be required to provide receipts and justification for those

receipts on a timely basis.
 A separate employee reviews receipts and supporting documents to ensure
all expenditures are made appropriately.
 Credit card receipts are reconciled to credit card statements.
 Spending limits are placed on employees who are authorized to use a
company credit card or have access to company cash. Major expenditures
require pre-approval through formal purchasing procedures.
 Only those employees that need to make timely business expenditures
should receive authorization.
END OF CHAPTER 4
56

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CHAPTER 4:

CASH AND INTERNAL CONTROLS

Fraud Triangle 4-4

 Internal controls attempt to eliminate the opportunity element of

 Managers are entrusted with the resources of both the company’s

Avoided reporting Misclassified

Among other stipulations, SOX sets forth a variety of guidelines related to

Section 404, in particular, requires company management and auditors to

Risk assessment identifies and analyzes internal

The control environment sets the overall ethical

Components of Internal Control

LIVE NATION ENTERTAINMENT

Our management, including our Chief Executive Officer and Chief

• The overall attitudes and actions of management greatly

• Separation of duties – A set of procedures intended to separate

• Reconciliations – Management should periodically determine

Excerpt from Regal Entertainment’s Auditor’s Report Related to

 Even with the best internal control systems, financial misstatements

Internal control refers to a company’s plan to improve the accuracy

Five key components to an internal control system are (1) control

Control activities include those designed to prevent or detect

 Cash and checks (“paper”)

 The acceptance of credit cards provides an additional control by

• A movie theatre accepts MasterCard as payment for

 Like credit cards, debit cards offer customers a way to purchase

• A movie theatre pays $1,000 to advertise its show

• A movie theatre pays $1,000 to advertise its show times.

 Because cash is the asset of a company most susceptible to

Bank's Cash Company's

Company Records of Cash Activities

Reconciling the bank account involves the following three steps:

 Cash transactions recorded by the company, but not yet recorded

• Cash transactions recorded by bank but not company

Cash Receipts Deposits and Credits

Differences in Cash Collections 4-41

Differences in Cash Payments 4-42

Per bank statement $26,400 Per general ledger $34,600

Note Received 2,000

EFT for utilities (4,100) Step 3:

Company balance per reconciliation $29,500

Bank balance per reconciliation $29,500

 Students sometimes mistake an NSF check from a customer as a bad check

Update the balance in the company’s Cash account to adjust for

Record items that increase cash:

Record items that decrease cash:

 Some students try to update the Cash account for deposits

Timing + Deposits outstanding + Notes received by bank

± Bank errors ± Company errors

 In a bank reconciliation we reconcile the bank’s cash balance for:

 Establish a petty cash fund of $200.

May 1 Debit Credit

Petty Cash Fund Purchasing Manager Marketing Manager

May 31 Debit Credit

May 31 Debit Credit

 To make purchases on behalf of the company, some employees are

 Employees should be required to provide receipts and justification for those

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