Cash Management O Accurately account for cash O Prevent theft and fraud O Assure the availability of adequate amounts of cash O Avoid unnecessarily large amounts of idle cash Irwin McGraw-Hill TThe McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill ⚫ Accurately account for cash. ⚫ Prevent theft and fraud. ⚫ Assure the availability of adequate amounts of cash. ⚫ Avoid unnecessarily large amounts of idle cash. Cash Management
Using excess cash balances Efficiently Cash available for Cash not needed for long -term investment may be used to finance business purposes should be distributed growth and expansion of the business, or to to the company's stockholders repay debt 田BANK Irwin/McGraz-Hill TThe McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Using Excess Cash Balances Efficiently Cash available for long-term investment may be used to finance growth and expansion of the business, or to repay debt. Cash not needed for business purposes should be distributed to the company’s stockholders
Internal Control over cash 0 Segregate authorization, custody and recording of cash ● Prepare a cash budget O Prepare a control listing of cash receipts O Require daily deposits o Make all payments by check o Verify every expenditure before payment o Promptly reconcile bank statements Irwin/McGraz-Hill TThe McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Internal Control Over Cash ⚫ Segregate authorization, custody and recording of cash. ⚫ Prepare a cash budget. ⚫ Prepare a control listing of cash receipts. ⚫ Require daily deposits. ⚫ Make all payments by check. ⚫ Verify every expenditure before payment. ⚫ Promptly reconcile bank statements
Cash Over and short On May 5, XBAR, Inc. fA cash drawer was counted and found to be $10 over GENERAL JOURNAL Date Account Titles and Explanation De bit Credit May 5 cash Cash Over and short 10 Cash Over and Short is debited for shortages and credited for overages Irwin McGraw-Hill TThe McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Cash Over and Short GENERAL JOURNAL Date Account Titles and Explanation Debit Credit May 5 Cash 10 Cash Over and Short 10 Cash Over and Short is debited for shortages and credited for overages. On May 5, XBAR, Inc.抯 cash drawer was counted and found to be $10 over
Bank statements Shows the beginning bank balance, deposits made, checks paid, other debits and credits in the month, and the ending bank balance BANK Bank Statement Irwin/McGraz-Hill TThe McGraw-Hill Companies, Inc, 1999
?The McGraw-Hill Companies, Inc., 1999 Irwin/McGraw-Hill Bank Statements Shows the beginning bank balance, deposits made, checks paid, other debits and credits in the month, and the ending bank balance. Bank Statement