Learning Guide: Accounts and Budget Service

Axum poly technique college
Training, Teaching and Learning Materials
ACCOUNTS AND BUDGET SERVICE LEVEL IV
Learning Guide
Unit of Competence Establish and Maintain a Cash Accounting
System
Module Title Establishing and Maintaining a Cash Accounting
System
LG Code: BUF ACB4 13 0812
TTLM Code: BUF ACB4M 13 0812
TTLM Development Manual Date: October 12,2013

Compiled by: Frehiwot gidey, Acct department
INTRODUCTION
Welcome to the module “Establish and Maintain a Cash

Accounting System”. This learner’s guide was prepared to help you achieve
the required competence in “Accounts and Budget Support Level IV ”. This will
be the source of information for you to acquire knowledge attitude and skills in this
particular occupation with minimum supervision or help from your trainer.
Summary of Learning Outcomes
After completing this learning guide, you should be able to:
Lo1:- . Identify relevant information and establish a chart of accounts

Lo2:- . Analyse and verify source documents
Lo3:- Process receipts and payments
Lo4:- . Set up and maintain a petty cash system
Lo5:- Process and reconcile credit cards
Lo6:- Manage bank reconciliations and prepare and produce reports
How to Use this TTLM
o Read through the Learning Guide carefully. It is divided into sections

that cover all the knowledge, skills and attitude that you need.
o Read Information Sheets and complete the Self-Check at the end of
each section to check your progress
o Read and make sure to Practice the activities in the Operation Sheets.
Ask your trainer to show you the correct way to do things or talk to
more experienced person for guidance.
o When you are ready, ask your trainer for institutional assessment and
provide you with feedback from your performance.

Lo1:- . Identify relevant information and establish

a chart of accounts
CASH
Chapter Objectives: At the end of the course the student is expected to understand:
 Controlling mechanism of cash

 Internal control of cash receipts
 Internal control of cash payments
 Bank reconciliation statements
 Voucher systems and petty cash
Introduction
Cash is any medium of exchange that a bank will accept at face value. It includes
bank deposits, currency, checks, bank drafts and money orders. Cash is the most
liquid asset in comparison to other assets. Because of the easy with which money
can be transferred, cash is the asset most likely to be diverted and used improperly
by employees. Moreover, money transactions either directly or indirectly affect the
receipt or payment of cash. It is, therefore, necessary that cash be effectively
safeguarded by special control.
The bank account as mechanism for controlling of cash

One of the major devices for maintaining control over cash is the bank account.
To get the best benefit from a bank account all cash received must be deposited
in the bank and all payment must be made by checks drawn on the bank or from
special cash funds. When such a system is followed, there is a double record of
cash, one maintaining by the business and the other by the Bank
Compensating balance:- in some cases, a bank may require a business to
maintain in a bank account a minimum cash balance. This requirement is
generally imposed by the bank as part of aloan agreement or line of credit which
is an amount the bank is willing to lend. This minimum balance that has to be
maintained in a bank is called compensating balance
The forms used by a business in connection with a bank account are: signature
card, deposit ticket, checks and record of checks drawn.
1. Signature card: - at the time an account is opened, an identifying number is

assigned to the account, and signature are must be signed by each person
authorized to sign checks drawn on account.
2. Deposit ticket: The details of a deposit are listed by the depositor on a
printed form supplied by a bank. Deposit ticket may be prepared in
duplicating, in which case the copy is stamped or initialed by the bank’s
teller and given to the depositor as a receipt. This method gives the
depositor written proof of the date and the total amount of the deposit.
3. Check: - A check is a written instrument signed by the depositor, ordering
the bank to pay a certain sum of money to the order of the designated
person. There are three parties to a check
a) The drawer:- the drawer is the one who signs the check ordering the
bank to pay cash from that person’s account or the account of a
business.
b) The drawee:- the drawee is the bank on which the check is drawn
c) The payee:- the payee is the one to whose order the check is drawn.
It is a person or a business to whom the bank is ordered to pay the
cash.

When checks are issued to pay bills, they are recorded as credits to cash on the
day issued even though they are not presented to the drawers’ bank until some
later time. More over , when checks are received from customers, they are
recorded as debits to cash, on the assumption that the customer has enough
money on deposit.
4. Records of checks drawn:- a memorandum record of the basic details of a
check should be prepared at the time the check is written. The record may
be a stub from which the check is detached or it may be a small booklet
designed to be kept with the check forms. Each type of record also provides
spaces for recording deposits and the current bank balance. Checks issued
to a creditor on account are usually accompanied by a notification of the
specific invoice that is being paid. The purpose of such notification some
times called a remittance advice. It helps to make sure that proper credit is
recorded in the accounts of the creditor. Mistakes are less likely to happen
and the possible need for exchange of correspondence is reduced.
Internal control of cash receipts
Department stores and other retail business as ordinarily receive cash from two
main sources.
1. Over the counter from cash customers
2. By mail from charge customer making payment on account
At the end of the business day, each sales check counts the cash in the assigned
cash drawer and records the amount on a memorandum from.
An employee from the cashiers department remove the cash register taper on
which total receipts were recorded from each cash drawer, counts the cash,
compares the total with the memorandum and the tape noting any difference.
The cash is then taken to the casher ‘s office and the tapes and memorandum

forms are forwarded to the accounting department, where they become the basis
for entries in the cash receipts journal
People who open incoming mail compare the amount of cash received with the
amount shown on the accompanying remittance advice (remittance notice) to be
certain that the two amounts agree. If there is no separate remittance advice, an
employee prepares one on a form designed for such use. All cash received,
usually in the form of checks and money orders, is sent to the cashiers
department where it is combined with the receipts from cash sales a deposit
ticket is prepared.
The remittance advices are delivered to the accounting department, where they
become the basis for entries in the cash receipts journal and for posting to the
customers account in the subsidiary ledger
Petty Cash
As previously emphasized, adequate internal control over cash requires that all
cash received be deposited in the bank and all disbursements be made by check.
How ever, every business finds it convenient to have a small amount of cash on
hand with which to make small minnor expenditures.
In most business there is a frequent need for the payment of relatively small
amounts, such as for postage due , for transportation charges or for the purchase of
urgently needed supplies at a near by retail store.
Payment by check in such cases would result in delay, annoyance, and excessive
expense of maintaining the records. Because these small payments may occur
frequently and therefore, amounts to a considerable total sum, it is desirable to
retain close control over such payments. This may be done by maintaining a
special cash fund called petty cash.

In establishing the petty cash fund, the first step is to estimate the amount of cash
needed for disbursement of relatively small amounts during a certain period, such
as a week or a month
If a voucher system is used, a voucher is then prepared for this amount and it is
recorded in the voucher register as a debit to petty cash and a credit to account
payable i.e.
Petty cash ---------------------xx
Account payable -----------------------xx
However, the check drawn to pay the voucher is recorded in the check register as a
debit to account payable and credit to cash in bank i.e.
Account payable ------------------xx
Cash in bank--------------------------------xx
The money obtained from cashing the check is placed in the custody of a specific
employee (cashier) who is authorized to disburse the fund according to restrictions
as to maximum amount and purpose.
When the amount of money in the petty cash fund is reduced to the predetermined
minimum amount, the fund is replenished. Replenished the petty cash fund restores
it to its original amount. If the voucher system is used in replenishing the petty
cash fund, the accounts debited on the replenishing voucher are those indicated by
a summary of expenditures. The voucher is then recorded in the voucher register as
debit to various expenses and asset accounts and accredits to account payable.
If the petty cash fund is used for the purchase of office supplies, utility expenses,
store supplies etc, the entry will be:

Office supplies xxx

Store supplies xxx
Utility expenses xxx
Account payable xxx
Because disbursements are not recorded in the accounts until the fund is
replenished, petty cash funds and other special funds that operate in like a manner
should always be replenished at the end of the accounting period.
The following example helps you to understand the recording system while the
petty cash fund is established and replenished.
Assume that a petty cash fund of Br. 200 was established on June 1 and that
payment total Br.174.95 was made from the fund during the next two weeks. Since
the Br. 200 originally placed in the fund is nearly exhausted, the fund therefore
should be replenished. To replenish petty cash fund means to replace the amount of
money that has been spent, thus, restoring the fund to its original amount. A check
is drawn payable to petty cash for the exact amount of the expenditure, Br. 174, 95.
This check is cashed and the money placed in the petty cash box.
The several entries to record establishment of the petty cash fund is shown as
follows.
June1 Petty cash 200

Cash at bank 200
The journal entry to record replenishment of petty cash fund is also shown as
follows (assume the petty cash is spent to purchase office supplies, for
transportation, portage and other miscellaneous expenses), therefore

Office supplies expense 80.60

June 15 Transportation - 16.00
Postage expense 45.25
Miscellaneous expense 33.10
Cash 174.95
Note that expense accounts are debited each time fund is replenished and the
petty cash account is debited only when the fund is first established. The petty
cash fund is usually replenished at the end of accounting period, even though the
fund is not running low.

Lo2:- . Analyse and verify source documents

4.2.2. Cash short and over
It is a usual practice that the amount of cash actually received during a day does
not agree with the record of cash receipts. Whenever there is a difference
between the record and the actual cash and no error can be found in the record,
it must be assumed that the mistake occurred in making change. The cash
shortage and overage is recorded in an account entitled cash short and over. A
common method for handling such mistakes is to include in the cash receipts
journal,
- As a debit to cash short and over account if cash is found to be short
- As a credit to cash short and over account if cash is found to be over
* If the amount of cash actually received is greater than the amount of cash
shown in the record, the difference is said to be cash overage. If the amount of
cash actually recorded is less than the amount of cash shown - In the record, the
deference is said to be cash shortage

For example, if the actual cash received from daily sales is less the amount
indicated by the cash registered totally, the entry in the cash journal would be:
Cash in bank xx
Cash short and over xx
Sales xx
If, however, the actual cash received from daily sales is grater than the amount
indicated by the cash registered totally, the entry in the cash journal would be:
Cash in bank xx
Sales xx
Cash short & over xxx
If cash overage is found at the end of the fiscal period, it is revenue and may be
listed in the other income section of the income statement. However, if cash
shortage is found at the end of the period, it is an expense and may be included in
the miscellaneous administrative expense on the income statement.
The following example helps you to understand how to maintain a record when
ever cash short and over is occurred.
Example 1 .If the actual cash received from cash sales is Br. 4,577.60 for the day.
However the amount indicated by the cash register is Br. 4,550.76. Therefore, the
actual cash received is less than the amount indicated by the cash register by the
amount of Br. 3.16
Cash ---------------------------------4577.60
Cash short and over 3.16
Sales 4580.76
Example 2 If the actual cash received from cash sales for the day is Br. 5000 and
the amount indicated by the cash registered is Br. 4,850 there for ,the actual cash
received is greater than the amount in the cash registered by Br. 150. The entry to
show the above fact is :
Cash 5,000
Sales 4,850
Cash short and over 150
4.2.3 Bank statement
Banks usually maintain an original and a copy of all checking account transactions.
When this is done the original becomes the statement of account that is mailed to
the depositor, usually once each month. The bank statement shows the beginning
balance, checks and the debits (deduction by the bank), deposits and other
credits (added by the bank) and the ending balance. The depositor’s checks
received by the bank during the period may accompany the bank statement,
arranged in the order of payment. The paid or canceled checks are perforated or
stamped “paid” together with the date of payment.
4.2.4 Bank reconciliation
Bank reconciliation is a schedule explaining any difference between the balance
shown in the bank statement and the balance shown in the depositor’s account
records. Remember that both the bank and the depositor are maintaining
independent records of the deposits, the checks and the current balance of the
bank account each month the depositor should prepare a bank reconciliation to
verify that these independent sets of records are in agreement. Therefore, the
process of bringing the bank balance and the depositor’s balance in to agreement
is called Bank reconciliation
The balance shown in a monthly bank statement seldom equals the balance
appearing in the depositor’s accounting records. Certain transactions recorded by
the depositor may not have been recorded by the bank. The most common
examples are:
1. Outstanding checks: are checks issued and recorded by the company but
not yet presented to the bank for payment.

2. Deposit in transit: cash receipts recorded by the depositor, but which

reached the bank too late to be included in the bank statement for the
current month.
In addition, certain transactions appearing in the bank statement may not have
been recorded by the depositor. For example:
1. Service charges: banks often charge a fee for handling small accounts, the
amount of this charge usually depends up on both the average balance of
the account and the number of checks paid during the month.
2. Charges for depositing sufficient fund: when checks are deposited, the
bank increases (credits) the depositor’s account. On occasion, one of these
checks may prove to be un collectible, because the maker of the check does
not have sufficient funds in his or her account. In such case, the bank will
reduce the depositor’s account by the amount of this un collectible item
and return the check of the depositor marked “NSF”
The depositor should view an NSF check as an account receivable from the
maker of the check, not as cash. The accounting entry required consists of a
debit to the account receivable from the customer and a credit to cash.
3. Credit for interest earned: most banks offer some checking accounts which
earn interest. At month end, this interest is credited to the depositor’s
account and reported on the bank statement.
4. Miscellaneous bank charges and credits: banks charge for services such as
printing checks, handling collections of notes receivable, and processing
Non sufficient fund checks the bank deducts these changes from the
depositors account and notifies the depositor by including a debit
memorandum in the monthly bank statement
If the bank collects a note receivable on behalf of the depositor, it adds the
money to the depositor’s account and issues accredit memorandum. In bank
reconciliation, the balances shown in the bank statement and in the accounting
records both are adjusted for any un recorded transaction. Additional
adjustments may be required to correct any errors discovered in the bank
statement or in the accounting records.
Generally, to prepare a bank reconciliation, we determine those items which
make up the difference between the ending balance per the bank statement and
the balance of cash according to the depositor’s records. By listing and studying
these reconciling items we can determine the correct figure for cash owned.
Example 1
The July bank statement sent by the bank to ABC company shows a balance of
cash on deposit at July 31 of Br.5000.17. Assume that on July 31,assum the on July
31, ABC’s ledger shows a bank balance of Br. 4, 262. 83.
1. A deposit of Br 410. 90 made after banking hours and doesn’t appear in the
bank statement
2. For checks issued in July have not yet been paid by the bank (outstanding
checks). Theses checks are:
Check No date amount
801 June 15
Br. 100,00
888 July 24
Br. 10.25
890 July 27
Br. 402.50
891 July 30 Br. 205.00

3. Proceeds from collection of anon – interest bearing note receivable from

David. ABC company had left this note with the banks collection
department.
4. Br. 24.75 interest earned on average account balance during July
5. Br. 5,00 fee charged by bank for handling collection of note receivable
6. Br. 50.25 check from customer John deposited by ABC company charged
bank as Non sufficient fund (NSF)
7. Br. 12.00 service charged by bank for the month of July.
8. Check number 875 was issued July 20 in the amount of Br 85 but was
erroneously recorded in the cash payment Journal as Br 58 for payment of
telephone expense
ABC Company
Bank reconciliation
July 31, 2001
Balance per bank statement July 31, 2001 -----------------Br. 5000. 17

Add. Deposit in transit-------------------------------------------- 410.90
Br 5, 411.07
Deduct: outstanding checks
Check No 801 Br 1,000
No 888 10.25
No 890 402,50
No 891 205,00 ( 717.75)
Adjusted cash balance ---------------------------------------- Br 4, 693.32

Balance per depositor’s record July 31, 2001 ----------------- 4,263.83

Add. Notes receivable collected for us by bank Br 500,00
Interest earned during July ---------------------- 24.74 524.74
Deduct: collection fee------------------------------- -Br. 5,00
NSF Br. 50.25
Bank service change 12.00
Error on check stub No 875 27.00
Br.(94.25)
Adjusted cash balance Br. 4, 693.32

Lo3:- Process receipts and payments
Up dating the accounting records

The last step in reconciling a bank statement is to up date the depositor’s
accounting record for any unrecorded cash transaction brought to light. In the
bank reconciliation, every adjustment to the balance per depositor’s record is a
cash receipt or a cash payment that has not been recorded in the depositor’s
accounts. There fore, each of theses items should be recorded.
* To record collection of note receivable from Devid collected by bank and
interest earned by bank:
Cash ------------------------------524.74
Notes receivable ------------------- 500,00
Interest Revenue ------------------- 24.75
* To record bank service charges, to reclassify NSF checks from customer as
account receivable and to correct understatement of cash payment for telephone
expenses.
Bank service changes 17.00
Account receivable 50.25
Telephone expense 27.00
Cash ----------- --------- 94.25
Importance of bank reconciliation
The bank reconciliation is an important part of the system of internal control,
because
1. It is a means of comparing recorded cash, as shown by the accounting
records, with the amount of cash reported by the bank.
2. It provide a means for finding and correcting errors and irregularities

In order to have a greater internal control, the bank reconciliation has to be
prepared by employees who do not take part in recording cash transactions with
the bank. Proper separation of duties is important to prevent cash from
embezzlement.
4.3. Internal control of cash payment
It is usually practice for business enterprise to require that every payment of cash
be evidenced by a check signed by a designated official. As an additional control,
some firms required two signatures on all checks or only on checks which are
larger than a certain amount. When an owner of a business has personal
knowledge of all goods and serves purchased, the owner may sign checks; with
the assurance that the creditors have followed the terms of their contracts and
that the exact amount of the obligation is being paid. Disbursing officials are
seldom able to have such a complete knowledge of affairs.
Most enterprises usually divided responsibility of issuing purchase orders
inspecting goods received and verifying contractual and arithmetical details of in
voices. It is desirable, therefore, to coordinate these related activities and to ink
them with the final issuance of checks to creditors. One of the best systems used
for this purpose is the voucher system.

Lo4:- . Set up and maintain a petty cash system
A voucher system
A voucher system is made up of records, methods, and procedures used in
proving and recording liabilities and in making and recording cash payments. A
voucher system uses (1) vouchers, (2) a voucher register, (3) a file for unpaid
vouchers, (4) a check register, and (5) a file for paid vouchers. As in all areas of
accounting systems and internal controls, many differences in detail are possible.
The discussion that follows refers to a medium-size merchandising enterprise
with separate departments for purchasing, receiving, accounting, and disbursing.
Vouchers: The term voucher is widely used in accounting. In a general sense, it
means any document that serves as proof of authority to pay cash, such as an
invoice approved for payment, or as evidence that cash has been paid, such as a
canceled check. The term has a narrower meaning when applied to the voucher
system: a voucher is a special form on which is recorded relevant data about a
liability and the details of its payment.
An important characteristic of the voucher system is the requirement that a
voucher be prepared for each expenditures. In fact, a check may not be issued
except in payment of a properly authorized voucher. Vouchers may be paid
immediately after they are prepared or at a later date, depending upon the
circumstances and the credit terms.
Voucher register: - after approval by the designated official, each voucher is
recorded in a journal known as a voucher register. When a voucher is paid, the
date of payment and the number of the check are inserted in the proper columns
in the voucher register. These notations provide a ready means of determining at

any time the amount of an individual unpaid voucher or of the total amount of
unpaid vouchers.
Unpaid voucher file: After a voucher has been recorded in the voucher register, it
is filed in an unpaid voucher file, where it remains until it is paid. The amount due
on each voucher represents the credit balance of an account payable, and the
voucher itself is like an individual account in a subsidiary accounts payable ledge.
Accordingly, a separate subsidiary ledger is not needed.
All voucher systems include some way to assure payment with in the discount
period or on the last day of the credit period. A simple but effective method is to
file each voucher in the unpaid voucher file according to the earliest date that
consideration should be given to its payment. The file may be made up of a group
of folders and numbered. Such a system brings to the attention of the disbursing
official the vouchers that are to be paid on each day. It also provides management
with a convenient means of forecasting the amount of cash needed to meet
maturing obligation.
When a voucher is to be paid, it is removed from the unpaid voucher file and a
check is issued in payment. The date, the number, and the amount of the check
are listed on the back, of the voucher for use in recording the payment in the
check register. Paid vouchers and the supporting documents are often run
through a canceling machine to prevent accidental or international reuse.
Check register: The payment of a voucher is recorded in a check register. The
check register is a modified form of the cash payments journal and is so called
because it is a complete record of all checks. It is common to record all checks in
the check register in sequential order, including occasional checks that are voided
because of an error in their preparation.
Paid voucher fill: After payment, vouchers are usually filed in numerical order in a
paid voucher file. They are then readily available for examination by employees or
independent auditors needing information about certain expenditure. Eventually
the paid vouchers are destroyed according to the firm’s policies concerning the
retention of records.
Activity four
1. The bank statement for XYZ Company for April 30 indicates a balance of Br.
10,443.11. The XYZ Company employs the voucher system in controlling
expenditures and disbursements. All cash receipts are deposited each evening in
a night depository, after banking hours. The accounting records indicate the
following summary data for cash receipts and disbursements for April
Cash in bank account
Balance as of April 1……………………..Br.5, 143.50
Cash receipts journal
Total cash receipts for April………………Br.28, 971.60
Check register
Total amount of checks issued in April……Br.26, 060.85
Comparison of the bank statement and the accompanying canceled checks and
memorandums with the records revealed the following reconciling items:
a. The bank had collected for XYZ Company Br. 912 on a note left for
collection. The face of the note was Br. 900
b. A deposit of Br. 1,852.21, representing receipts of April 30, had been
made too late to appear on the bank statement.
c. Checks outstanding totaled Br. 3,265.27
d. A check drawn for Br. 79 had been erroneously charged by the bank
as Br.97
e. A check for Br. 10 returned with the statement had been recorded in
the check register as Br. 100. The check was for the payment of an
obligation to Davis equipment company for the purchase of office
supplies on account

f. Bank service charges for April amounted to Br.8.20

Instruction:
 Prepare a bank reconciliation for April
 Journalize the entries that should be made by XYZ company
2. The following data are accumulated for use in reconciling the bank accounts
of Mega Company for June.
A. Balance per bank statement at June 30, Br. 7929.50
B. Balance per depositor’s record at June 30, Br. 6017.05
C. Checks outstanding Br. 2510.40
D. A checks for Br. 230 in payment of a voucher was erroneously
recorded in the check registered as Br. 320
E. Deposit in transit, not recorded by bank, Br. 671.25
F. Bank debit memorandum for service charges, Br. 16.70
INSTRUCTIONS:
A. Prepared a bank reconciliation
B. Prepared all necessary entries in a general journal
Self -Test -Four
1. What is meant by cash? Why is cash said to be the most liquid assets?
2. Distinguish between the drawers and the payee of a check?
3. What is the purpose of preparing bank reconciliation?
4. Identify each of the following reconciling items as:
i) An addition to the balance per bank statement
ii) A deduction from the balance per bank statement
iii) An addition to the balance per depositor’s record

iv) A deduction from the balance per depositor’s record

a) Deposit in transit
b) Note collected by bank
c) Outstanding checks
d) Check for Br. 100 charged by bank as Br. 1000
e) Check drawn by depositor for Br. 25 but recorded as Br. 250
f) Bank service charges
g) Check of a customer returned by bank to depositor’s because
of insufficient fund
5. The combined cash counts of all cash registers at the close of a business is
Br. 3.50 more than the cash sales indicated by the cash registered tapes
a) In what account is the cash overage recorded?
b) Are cash overages debited or credited to this account?
6. What is meant by the term voucher as applied to the voucher system?
7. What is meant by the term petty cash? Distinguish between establishment
and
replenishments of petty cash?
8. The cash in the bank account of XYZ Company at June 30, of the current
year indicated a balance of Br. 19, 650.30 after both the cash receipts
Journal and the check registered for June had been posted. The bank
statement indicated a balance of Br. 30,606.30 on June 30. Other related
events occurred during the month were:
1. Checks outstanding totaled Br. 14,941.50
2. A deposit of Br. 6,467.75 representing receipts of June 30, had been made
too late to appear on the bank statement

3. The bank had collected Br. 3090 on a note left for collection. the face of the
note was Br. 3000
4. A check for Br. 91 returned with the statement had been recorded
erroneously in the check register as Br. 19. The check was for the payment
of an obligation to ABC Company for the purchase of office equipment on
account.
5. A check drawn for Br. 55 had been erroneously charged by the bank as Br.
550
6. Bank service charges for June amounts to Br. 40.75
Instructions:
a. Prepare a bank reconciliation
b. Record the necessary entries in general journal form


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Axum poly technique college

Training, Teaching and Learning Materials

ACCOUNTS AND BUDGET SERVICE LEVEL IV

LG Code: BUF ACB4 13 0812

TTLM Code: BUF ACB4M 13 0812

TTLM Development Manual Date: October 12,2013

Welcome to the module “Establish and Maintain a Cash

Summary of Learning Outcomes

After completing this learning guide, you should be able to:

Lo1:- . Identify relevant information and establish a chart of accounts

o Read through the Learning Guide carefully. It is divided into sections

TTLM Development Manual Date: October 12,2013

Lo1:- . Identify relevant information and establish

 Controlling mechanism of cash

The bank account as mechanism for controlling of cash

1. Signature card: - at the time an account is opened, an identifying number is

TTLM Development Manual Date: October 12,2013

TTLM Development Manual Date: October 12,2013

TTLM Development Manual Date: October 12,2013

TTLM Development Manual Date: October 12,2013

Office supplies xxx

June1 Petty cash 200

TTLM Development Manual Date: October 12,2013

Office supplies expense 80.60

TTLM Development Manual Date: October 12,2013

Lo2:- . Analyse and verify source documents

TTLM Development Manual Date: October 12,2013

TTLM Development Manual Date: October 12,2013

2. Deposit in transit: cash receipts recorded by the depositor, but which

TTLM Development Manual Date: October 12,2013

3. Proceeds from collection of anon – interest bearing note receivable from

Balance per bank statement July 31, 2001 -----------------Br. 5000. 17

TTLM Development Manual Date: October 12,2013

Balance per depositor’s record July 31, 2001 ----------------- 4,263.83

TTLM Development Manual Date: October 12,2013

Lo3:- Process receipts and payments

Up dating the accounting records

2. It provide a means for finding and correcting errors and irregularities

TTLM Development Manual Date: October 12,2013

Lo4:- . Set up and maintain a petty cash system

TTLM Development Manual Date: October 12,2013

TTLM Development Manual Date: October 12,2013

f. Bank service charges for April amounted to Br.8.20

TTLM Development Manual Date: October 12,2013

iv) A deduction from the balance per depositor’s record

TTLM Development Manual Date: October 12,2013

TTLM Development Manual Date: October 12,2013

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