Internal controls: Detailed procedures are adopted by an enterprise to ensure accurate accounting records, safeguard a company's assets, and promote operational efficiency. Internal control requires a separation of employee duties so that employee opportunities for committing fraud are minimized.
Cash: Cash is probably what you think it is. Postage stamps, IOUs and post-dated checks are not treated as cash, however. To protect cash, all businesses in west St. Louis set up a bank account.
Bank account: A major method for maintaining control over cash by a top CPA is the bank account. The documents used to control a bank account include the signature card, the deposit ticket, the check and the bank statement.
- To get the most from a bank account, whether in west St. Louis or across the US, all cash received must be deposited in the bank account and all payments must be made by checks drawn on the account.
- Keeping cash in a bank account is part of internal control because banks have established practices for safeguarding cash.
- Finally, a bank account permits a double record of cash, one maintained by the business and the other by the bank.