Question

why is it so important to go through so much trouble and extra steps to protect cash? Do you have a work environment where you have seen some of the things mentioned in the book being done at work?

Answer 1

Cash is an important part or we say a fuel to any business. Every business suffer trouble when it comes to protecting cash because its an important resource for any company to carry day-to-day transactions. So we need to be extra careful while maintaining the cash. Its important because:

- It initiates the transaction.

- Meeting business needs and avoiding taking debts.

- An accountant has to give each and every record of a single penny so it is very important to maintain the cash records and receipts .

- It is a highly liquid asset and it involves so much of risk for a cashier to maintain as it involves chances of theft carelessness and mis management which may lead to loosing the cash.

- It requires highly secured environment.

- There is so much of trouble and extra steps to protect cash because in accounting we have to give evidence for every transaction related to cash to the company and making these transactions we require its recording in various books of accounts. It involves various steps and procedures but it creates a good clarification for further accountability .

2) Yes there is a work environment where we have have to mention immediately about the cash transactions in the books while working.

- Receiving cash over the counter and it involves immediately recording and placing it in a cash receipt

- Recording cash sales immediately

- Making record of all cash receipts as soon as cash is received

- Depositing the cash receipts

- Usage of cash to carry out day to day activities for example petty cash