To effectively manage petty cash:
1.Assignment of responsibility: Petty cash is maintained by one employee only.
2.Segregation of duties: The employee responsible for petty cash is not responsible for purchasing or recording the transactions.
3.Authorization: Petty cash transactions must be authorized by the appropriate individuals.
4.Approval limits: If purchases are above a certain threshold, additional approval is required.
5.Documentation: Petty cash transactions must be supported by documentation (petty cash vouchers and receipts).
6.Physical control: Petty cash should be locked in a safe
Qs: Using the activities we just saw and our knowledge of control activities, what are some potential controls over petty cash?