1. Good internal control procedures require cash disbursements be made by cheque. The exception: Small payments required in most companies for items such as postage, courier fees, repairs, and supplies. 1 © 2013 McGraw-Hill Ryerson Limited. Petty Cash System of Internal Control LO 4

2. Cashier’s Office Petty Cashier Operating a Petty Cash Fund Prepares cheque to establish petty cash fund. 2 © 2013 McGraw-Hill Ryerson Limited. LO 4

3. The petty cashier makes payments from this fund for small disbursements. … and ensures a petty cash receipt is signed by the person receiving the money to easily identify the expenses paid from petty cash. 3 © 2013 McGraw-Hill Ryerson Limited. Operating a Petty Cash Fund LO 4

4. A cheque is issued and the fund is replenished when the amount of cash on hand becomes low. 4 © 2013 McGraw-Hill Ryerson Limited. Operating a Petty Cash Fund A cash over and short account is used if needed. LO 4

5. 5 © 2013 McGraw-Hill Ryerson Limited. Operating a Petty Cash Fund LO 4 Cash required to replenish petty cash = Fund size Cash remaining - Cash over/(short) = Total of petty cash receipts - Cash required to replenish petty cash