Question

In: Accounting

Sometimes there can be errors while making change for a customer or recording a check incorrectly....

Sometimes there can be errors while making change for a customer or recording a check incorrectly. What are some of the controls we can put over cash that would help prevent errors?

Solutions

Expert Solution

Cash and Internal Controls.

Since cash is the most liquid of all assets, a business cannot survive and prosper if it does not have adequate control over its cash. Cash is the asset that has the greatest chance of “going missing” and this is why we must ensure that we have strong internal controls build around the cash process. Since many business transactions involve cash, it is a vital factor in the operation of a business. Of all the company’s assets, cash is the most easily mishandled either through theft or carelessness. To control and manage its cash, a company should:

  • Account for all cash transactions accurately so that correct information is available regarding cash flows and balances.
  • Make certain that enough cash is available to pay bills as they come due.
  • Avoid holding too much idle cash because excess cash could be invested to generate income, such as interest.
  • Prevent loss of cash due to theft or fraud.

The need to control cash is clearly evident and has many aspects. Without the proper timing of cash flows and the protection of idle cash, a business cannot survive.

Companies protect their Cash by

(1) segregating employee duties,

(2) assigning specific duties to each employee,

(3) rotating employee job assignments, and

(4) using mechanical devices.

Measures to prevent CASH errors.

  1. You don’t manage your cash in a timely manner.
  2. Your employees are not kept accountable for their cash.

  3. No one is really in charge.

  4. Your cashiers are using careless transaction practices.

  5. Your cash management system is outdated.


Related Solutions

Sometimes there can be errors while making change for a customer or recording a check incorrectly....
Sometimes there can be errors while making change for a customer or recording a check incorrectly. What are some of the controls we can put over cash that would help prevent errors?
The probability that a vehicle will change lanes while making a turn is 55%. Suppose a...
The probability that a vehicle will change lanes while making a turn is 55%. Suppose a random sample of 7 vehicles are observed making turns at a busy intersection. a) Find the probability that no more than 4 vehicles will change lanes while making the turn. b) Calculate the expected value u of the vehicles that will change lanes while making turn c) Calculate the standard deviation
Decision Making Gone Awry Sometimes social influences and societal pressures can influence decision making for the...
Decision Making Gone Awry Sometimes social influences and societal pressures can influence decision making for the better and sometimes for the worse. In addition to these pressures, there are risks that need to be evaluated and measured when making decisions. In this assignment, you will reflect on decisions you made using social influence, persuasion, and risk taking that went awry. Examine a time when you were involved in decision making that went awry as a result of protocols, social norms,...
While OLEDS are useful, sometimes they can be hard to convert to regular devices. 1)Are OLED's...
While OLEDS are useful, sometimes they can be hard to convert to regular devices. 1)Are OLED's more or less robust than inorganic LEDS and why? 2) If a defect, for example a disruption in the conjugation of a polymer occurred, how would this change the light emitting properties of the material? 3) If lemon juice was spilled on your phone (aq citric acid) Draw the repeating unit of PPV and the mechanism of this species with aqueous acid. Would a...
How can I make a method to check out a customer given their name and booking...
How can I make a method to check out a customer given their name and booking number in Java. I have provided the Book class as well as the customer class. I have done the method to add a customer into the array however im failng to implement a method that checks out the customer. If you need more classes associated with the system please let me know ASAP and I will provide them, ----------------------------------------------------------------------------------------------------------------------------------- public class Book{    String...
Writing Essay. Can anyone check my essay whether there is grammar errors or poor words? (repetitive...
Writing Essay. Can anyone check my essay whether there is grammar errors or poor words? (repetitive words) If there is a problem my essay, can some one revise it ? Toptic : Identify one community of practice of which you are a member. In your own words, describe what makes it a community of practice. In addition, comment on what is effective or ineffective about this community in terms of facilitating learning for adults. When I was in high school,...
Linear programming can be used in making product mix decisions. Explain why it is sometimes undesirable...
Linear programming can be used in making product mix decisions. Explain why it is sometimes undesirable to concentrate on maximising sales of products with the highest unit contribution margin
Different mechanisms create different types of chromosomal aberrations; for example, nondisjunction can cause ____________, while errors...
Different mechanisms create different types of chromosomal aberrations; for example, nondisjunction can cause ____________, while errors in DNA damage repair may cause ____________. inversions; trisomy monoploidy; inversions inversions; monoploidy trisomy; monoploidy monoploidy; trisomy trisomy; inversions
Sometimes management will use nonfinancial information when making decisions. Identify some qualitative factors which can be...
Sometimes management will use nonfinancial information when making decisions. Identify some qualitative factors which can be used when making managerial decisions. Do you believe using these factors are beneficial to a company?
Why do healthcare workers make so many errors and mistakes? How can making accurate calculations and...
Why do healthcare workers make so many errors and mistakes? How can making accurate calculations and using effective problem-solving techniques reduce the number of errors and mistakes? Why are healthcare workers reluctant to report mistakes and errors? Why is it important to empower healthcare workers to speak up when they have concerns about patient safety? How do National Patient Safety Goals help prevent sentinel events?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT