CHAPTER 8

Recording monies
Contents
 Controls over recording receipts
 Cash registers
 Cash received sheets (remittance lists)
 Posting cash receipts to the general
ledger
Controls over recording
receipts
Segregation of duties Bank reconciliations
 Receiving and the  Exam focus
recording functions are
kept separate  ?
 One person will receive,
count and perhaps bank
the money
 Another person will
record the money
received.
 What for?
 Avoiding theft
 Collusion
Cash registers

What is it? Security and controls

 To check the  Who can access
amount of money  Training
in the cash  Work observation
register at the end
of the day against
 The maximum
the summary possible amount of
preset information
 To record receipts
in the cash book
 Periodic info
analysis
Cash received sheets
(remittance lists)
Manually Pre-printed
Check it out
Solution
Three errors.
(a) It is incorrect to try to balance the two discount
columns.
 The discounts allowed: an expense of the

business
 Discounts received a benefit to the business

 Should be treated separately and not 'netted off’

(b) The cash balance brought down should be

$110.31 and not $119.31.
(c) The bank balance brought down should be
$1,621.48 DR and not $1,621.48 CR, ie it is on
the wrong side of the cash book. The added up
Posting from cash book
 Suppose we wished to post Warren Miles's
cash received for 1 September 20X7 to
his general ledger. The relevant general
ledger accounts are as follows
Posting results
Quiz
1 What is 'segregation of
duties' when dealing with
cash receipts?
2 The cash book reflects the
movement of notes and
coins through the business.
True or false?
3 Why is a discount allowed
column required in the cash
book?
4 Is it easier for the operator
if the computerized
receivables ledger and
general ledger are
interfaced?
1 The receiving and recording
functions are kept separate
to avoid theft.
2 False. The cash book
records movements
through the business bank
account. Notes and coins
are recorded in the petty
cash book.
3 The discount allowed
column shows why the full
amount of a debt has not
been received, for clearing
the total amount in the
receivables ledger.
4 Yes, because journals
updating the general
ledger do not have to be
QB 16
Cash received sheets (remittance lists) are
best described as
A Documents used to record money received
from sales made
B Documents used to record customer
discounts
C Documents used to reconcile the bank
balance with the cash book
D Documents used to record refunds from
suppliers

Answer: A