Management of Cash Functions and other issues of Internal Control
You are president of your local division, responsible for cash receipts and disbursements. You are working with your local bank to discuss a new system where you invoices will indicate a 'send payments to' address that the bank will manage, providing your company scanned copies of all documents received. Explain, in a bulleted list, or brief paragraph, the pros and cons of this system, as it relates to cash receipts and cash disbursements.
Bank Reconciliation
The Bank Balance presented on the bank statement totals $12,000 while the general ledger cash balance for this account, on the same date, the last day of the month, displays a value of $15,600.
Please explain the issues related to this difference and how they would be resolved. Use you experience in creating a bank reconciliation to assist you in considering the variables.
Petty Cash
The auditors arrived to check the petty cash balance in your office. The account has a balance of $65 and the receipts not yet presented for reimbursement total $52. The Petty Cash Fund was issued several years ago for $100. How would you explain the current situation to the auditor? What might cause the balance to be off?