Flashcards in Ch. 7: Safeguarding Cash - Special Controls Deck (18)
bank reconciliation statement
A statement prepared once a month to bring about agreement between the checkbook balance and the bank balance.
An order to the bank on which it is written to pay a specific sum of money to a designated party.
petty cash fund
A small amount of money, usually $50 to $150, set aside to pay for insignificant expenditures for which a check would not be accepted or appropriate.
A method of establishing control over the making of expenditures for the payment of liabilities. All transactions that will eventually result in the payment of cash must first be recorded as liabilities, using the various books of the voucher system.
The process by which an account’s balance as shown on the bank’s records is brought into agreement with the balance shown on the depositor’s records.
A record that is sent by the bank, usually on a monthly basis, to indicate the bank’s record of the activities, including deposits, paid checks, various bank charges, collections made by the bank to the customer’s account, and payments authorized from the customer’s account, within an individual checking account.
A register replacing the cash payments journal when the voucher system is in use. It serves the same function as the cash payments journal, except that the account debited is vouchers payable.
deposits in transit
Deposits that have been sent to the bank but not yet received and recorded by the bank.
A form prepared in order to place money into a checking account. The resulting balance after the deposit is made is then used to pay checks that are issued on that account.
Control of an organization’s operations, through procedures designed to safeguard its assets, generate appropriate accounting data, and ensure efficient productivity.
An item on a bank reconciliation statement that represents a check issued to the payee, but not yet paid by the bank and therefore not shown on the bank statement.
petty cash book
A book maintained to record the outlay of cash from the petty cash fund.
petty cash voucher
A document prepared as evidence of the outlay of a small sum of money and signed by the person receiving the money from the petty cashier.
replenish the fund
To replace in a petty cash fund the amounts withdrawn from it. The process involves the preparation of a check and the recognition of the expenses that caused the fund to become depleted.
A card required in order to open a checking account that bears the signatures of the authorized signers of an organization’s checks.
unpaid voucher file
A file containing unpaid vouchers that is organized according to the due dates of the vouchers.
A document that contains specific information dealing with the recognition and subsequent payment of an obligation.