| Segregation of Duties |
Custody of cash must be separated from recordkeeping and authorization. |
Prevents an employee from stealing cash and concealing it by altering ledger entries. |
| Establishing Petty Cash |
Establish an imprest fund with a fixed cash amount under a designated custodian. |
Debit: Petty Cash
Credit: Cash (Bank) |
| Replenishing Petty Cash |
Debit individual expense accounts based on receipts; do not debit Petty Cash. |
Debit: Supplies, Postage, etc.
Credit: Cash (Bank) |
| Cash Over and Short |
Balances register tape totals against physical cash counts. |
Shortage = Debit (Expense)
Overage = Credit (Other Revenue) |
| Voucher System |
All disbursements (except petty cash) must be paid via authorized checks or ACH. |
Requires purchase order, receiving report, and vendor invoice match before payment. |