ACC 113 Lecture Notes - Lecture 26: Petty Cash, Bank Reconciliation, Bank Statement

• School: Tunxis Community College
• Department: Accounting
• Course: ACC 113
• Professor: Lardie

Document Summary

Bank reconciliation reconciling differences between cash balance on bank statement and cash balance in company"s record. Confirms accuracy of bank"s and company"s cash records. Adjusting company"s book balance: done by recording necessary journal entries such as errors. Petty cash funds amount of cash kept on hand to pay for minor expenditures such as postage and miscellaneous funds. Making payments from fund cash taken from fund to make payment or employees can seek reimbursement for payments personally made: custodian collects receipts, no journal entries are made until replenishment of fund. Replenishing fund remaining cash in fund is counted and company cashes cheque for amount that brings total cash in fund back to original balance. Cash over and short temporary account created when petty cash fund replenishment has discrepancy. Cash equivalent any investment that is readily convertible into known amount of cash and may be limited to a maturity of six months or less.