Chapter 7: Q8RQ (page 411)
How do businesses control cash receipts over the counter?
Cash receipts are controlled with the help of a point-of-sale terminal.
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What are two common methods used when accepting deposits for credit card and debit card transactions?
Why is it necessary to record journal entries after the bank reconciliation has been prepared? Which side of the bank reconciliation requires journal entries?
Accounting for petty cash transactions
Suppose that on June 1, Rockin’ Gyrations, a disc jockey service, creates a petty cash
fund with an imprest balance of \(300. During June, Michael Martell, fund custodian,
signs the following petty cash tickets:
Petty Cash
Ticket Number Item Amount
1 Postage for package received \) 30
2 Office party 25
3 Two boxes of stationery 20
4 Printer cartridges 15
5 Business dinner 65
On June 30, prior to replenishment, the fund contains these tickets plus cash of \(140.
The accounts affected by petty cash payments are Office Supplies, Entertainment
Expense, and Postage Expense.
Requirements
1. On June 30, how much cash should this petty cash fund hold before it is replenished?
2. Journalize all required entries to (a) create the fund and (b) replenish it. Includeexplanations.
3. Make the entry on July 1 to increase the fund balance to \)325. Include an explanation
Question: How does the Sarbanes-Oxley Act relate to internal controls?
How do businesses control cash receipts by mail?
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