Cash and Internal Controls

1. Cash and Internal Controls

2. www.themegallery.com Company Logo Cash and Internal Controls

3. www.themegallery.com Company Logo Purpose Of Internal Control Policies and procedures managers use to: Protect assets. Ensure reliable accounting. Promote efficient operations. Urge adherence to company policies. An internal control system is a collection of policies and procedures that protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies. An internal control system is a collection of policies and procedures that protect assets, ensure reliable accounting, promote efficient operations, and urge adherence to company policies.

4. www.themegallery.com Company Logo Purpose Of Internal Control The Sarbanes-Oxley Act requires managers and auditors of public companies to document and certify the system of internal controls. Specific requirements related to auditors are: Auditors must evaluate internal controls and issue internal control reports. Auditors of a client are restricted as to what consulting services they can perform for that client. The person leading an audit can serve no more than seven years without a two-year break. Auditors’ work is overseen by the Public Company Accounting Oversight Board. Harsh penalties exist for violators – sentences up to 25 years in prison with severe fines. The Sarbanes-Oxley Act requires managers and auditors of public companies to document and certify the system of internal controls. Specific requirements related to auditors are: Auditors must evaluate internal controls and issue internal control reports. Auditors of a client are restricted as to what consulting services they can perform for that client. The person leading an audit can serve no more than seven years without a two-year break. Auditors’ work is overseen by the Public Company Accounting Oversight Board. Harsh penalties exist for violators – sentences up to 25 years in prison with severe fines.

5. www.themegallery.com Company Logo Principles Of Internal Control Internal control principles common to all companies: Establish responsibilities.????? Maintain adequate records.???????? Insure assets and bond key employees.?????,???????????? Separate recordkeeping from custody of assets.?????????????? Divide responsibility for related transactions.?????????? Apply technological controls.????????? Perform regular and independent reviews.????????? Principles of internal control include: Establish responsibilities. Proper internal control means that responsibility for a task is clearly established and assigned to one person. Maintain adequate records. Good recordkeeping is part of an internal control system. It helps protect assets and ensures that employees use prescribed procedures. Insure assets and bond key employees. Good internal control means that assets are adequately insured against casualty and that employees handling large amounts of cash and easily transferable assets are bonded. Separate recordkeeping from custody of assets. A person who controls or has access to an asset must not keep that asset’s accounting records. Divide responsibility for related transactions. Good internal control divides responsibility for a transaction or a series of related transactions between two or more individuals or departments. Apply technological controls. Cash registers, check protectors, time clocks, and personal identification scanners are examples of devices that can improve internal control. Perform regular and independent reviews. Changes in personnel, technological advances, and normal business pressures for performance necessitate reviews to ensure that proper procedures are being followed on a consistent basis. Principles of internal control include: Establish responsibilities. Proper internal control means that responsibility for a task is clearly established and assigned to one person. Maintain adequate records. Good recordkeeping is part of an internal control system. It helps protect assets and ensures that employees use prescribed procedures. Insure assets and bond key employees. Good internal control means that assets are adequately insured against casualty and that employees handling large amounts of cash and easily transferable assets are bonded. Separate recordkeeping from custody of assets. A person who controls or has access to an asset must not keep that asset’s accounting records. Divide responsibility for related transactions. Good internal control divides responsibility for a transaction or a series of related transactions between two or more individuals or departments. Apply technological controls. Cash registers, check protectors, time clocks, and personal identification scanners are examples of devices that can improve internal control. Perform regular and independent reviews. Changes in personnel, technological advances, and normal business pressures for performance necessitate reviews to ensure that proper procedures are being followed on a consistent basis.

6. www.themegallery.com Company Logo Technology And Internal Control The use of technology has an impact on internal controls. Technology can help reduce processing errors and allow more extensive testing of records. However, it can also limit evidence of processing because of the lack of a paper trail. Because more work can be performed by one person, it can also create situations that cause a lack of separation of duties. Technology has encouraged the growth of e-commerce, which has greatly enhanced the need for strong internal controls. The use of technology has an impact on internal controls. Technology can help reduce processing errors and allow more extensive testing of records. However, it can also limit evidence of processing because of the lack of a paper trail. Because more work can be performed by one person, it can also create situations that cause a lack of separation of duties. Technology has encouraged the growth of e-commerce, which has greatly enhanced the need for strong internal controls.

7. www.themegallery.com Company Logo Limitations of Internal Control Any internal control system has limitations. Because humans are involved in the internal control system, our negligence, fatigue, misjudgment, and confusion can negatively impact the goals of the system. Also, an internal control system can be circumvented by individuals who desire to commit fraud and who are willing to work together to do so. Any internal control system has limitations. Because humans are involved in the internal control system, our negligence, fatigue, misjudgment, and confusion can negatively impact the goals of the system. Also, an internal control system can be circumvented by individuals who desire to commit fraud and who are willing to work together to do so.

8. www.themegallery.com Company Logo Limitations of Internal Control We also must keep in mind that the costs of internal controls must not exceed their benefits. A department store could drastically cut shoplifting losses by having an armed guard escort each customer while in the store. Obviously, the cost of this internal control exceeds the benefit, not to mention the impact it would have on customer morale. We also must keep in mind that the costs of internal controls must not exceed their benefits. A department store could drastically cut shoplifting losses by having an armed guard escort each customer while in the store. Obviously, the cost of this internal control exceeds the benefit, not to mention the impact it would have on customer morale.

9. www.themegallery.com Company Logo Control of Cash Control of cash focuses on three areas: Those who handle cash should be separate from those who keep records of cash. Cash receipts should be deposited daily in the bank. Cash disbursements should be made by check. Control of cash focuses on three areas: Those who handle cash should be separate from those who keep records of cash. Cash receipts should be deposited daily in the bank. Cash disbursements should be made by check.

10. www.themegallery.com Company Logo Cash, Cash Equivalents,and Liquidity On a balance sheet, cash is combined with cash equivalents. Cash includes currency, coins and amounts on deposit in bank accounts, checking accounts, and savings accounts. Cash equivalents include short-term, highly liquid investments that are easily converted into a known cash amount and that are close to maturity and are not sensitive to interest rate changes. On a balance sheet, cash is combined with cash equivalents. Cash includes currency, coins and amounts on deposit in bank accounts, checking accounts, and savings accounts. Cash equivalents include short-term, highly liquid investments that are easily converted into a known cash amount and that are close to maturity and are not sensitive to interest rate changes.

11. www.themegallery.com Company Logo Cash Management Part I. The goals of cash management are twofold: 1. Plan cash receipts to meet cash payments when due. 2. Keep a minimum level of cash necessary to operate. Part II. Effective cash management involves applying the following cash management principles: Encourage collection of receivables. Delay payment of liabilities. Keep only necessary levels of assets. Plan expenditures. Invest excess cash. Part I. The goals of cash management are twofold: 1. Plan cash receipts to meet cash payments when due. 2. Keep a minimum level of cash necessary to operate. Part II. Effective cash management involves applying the following cash management principles: Encourage collection of receivables. Delay payment of liabilities. Keep only necessary levels of assets. Plan expenditures. Invest excess cash.

12. www.themegallery.com Company Logo Control Of Cash Receipts Over-the-Counter  Cash Receipts ????????????? Cash register with locked-in record of transactions. Compare cash register record with cash reported. Cash Receipts by Mail?????? Two people open the mail. Money to cashier’s office. List to accounting dept. Copy of list filed. Because cash is the most liquid asset, it is the most susceptible to theft. As a result, the controls over cash receipts are important. A cash register’s listing of cash transactions can be compared to actual cash in the register to determine if cash in the register is correct. When cash is received by mail, have two people present when opening the mail to deter theft. The cash is sent to the cashier, a list of who paid the cash is sent to the accounting department, and a copy of the list is filed. Because cash is the most liquid asset, it is the most susceptible to theft. As a result, the controls over cash receipts are important. A cash register’s listing of cash transactions can be compared to actual cash in the register to determine if cash in the register is correct. When cash is received by mail, have two people present when opening the mail to deter theft. The cash is sent to the cashier, a list of who paid the cash is sent to the accounting department, and a copy of the list is filed.

13. www.themegallery.com Company Logo Cash Over And Short????  Sometimes errors in making change are discovered from differences between the cash in the cash register and the record of the amount of cash receipts. If a cash register’s record shows $550 but the count of cash in the register is $555, we would debit Cash for $555, credit Cash Over and Short for $5, and credit Sales for $550. The Cash Over and Short account will appear in the income statement and is closed at the end of the period. It will be classified as either miscellaneous revenue or miscellaneous expense, depending on the account balance.  Sometimes errors in making change are discovered from differences between the cash in the cash register and the record of the amount of cash receipts. If a cash register’s record shows $550 but the count of cash in the register is $555, we would debit Cash for $555, credit Cash Over and Short for $5, and credit Sales for $550. The Cash Over and Short account will appear in the income statement and is closed at the end of the period. It will be classified as either miscellaneous revenue or miscellaneous expense, depending on the account balance.

14. www.themegallery.com Company Logo Cash Over And Short???? Cash over and short also called cash short and over, which is an income statement account recording the income effect of cash overages and cash shortages. On the other hand, if a cash register’s record shows $555 but the count of cash in the register is $550, the entry to record cash sales and its shortage is: DR Cash 550 Cash Over and Short 5 CR Sales 555 Cash over and short debit balance reflects an expense. It is reported on the income statement as part of general and administrative expense. (since the amount is usually small, it is often combined with other small expenses and reported as part of miscellaneous expenses ---or as part of miscellaneous revenues if it has credit balance. )

15. www.themegallery.com Company Logo Control of Cash Disbursements All expenditures should be made by check. The only exception is for small payments from petty cash. Separate authorization for check signing and recordkeeping duties. Use a voucher system???. Requiring all disbursements to be made by check is a common internal control policy. Other controls include the separation of the following duties: authorization for the disbursement, check signing, and recordkeeping. Use of a voucher system also provides a good control over disbursements. Let’s look at the voucher system described on the next slide. Requiring all disbursements to be made by check is a common internal control policy. Other controls include the separation of the following duties: authorization for the disbursement, check signing, and recordkeeping. Use of a voucher system also provides a good control over disbursements. Let’s look at the voucher system described on the next slide.

16. www.themegallery.com Company Logo Voucher System Of Control A voucher system establishes procedures for: Verifying, approving and recording obligations for eventual cash disbursements. ?????????????????? Issuing checks for payment of verified, approved and recorded obligations. ?????????????????? A voucher system establishes procedures that help to verify, approve and properly record cash disbursements. A key factor in this system is that only approved departments and individuals are authorized to incur obligations in the company’s name. A voucher system establishes procedures that help to verify, approve and properly record cash disbursements. A key factor in this system is that only approved departments and individuals are authorized to incur obligations in the company’s name.

17. www.themegallery.com Company Logo Voucher System Of Control In a voucher system, a purchase requisition initiates the process for a purchase. If approved, the purchase requisition triggers the issuance of a purchase order. An invoice is received from the vendor once a purchase is made. A receiving report indicates that we actually received the goods. The invoice approval indicates that we ordered the goods, we received the goods we ordered, and that we were billed for the goods we ordered and received. The invoice approval triggers the check preparation for a valid purchase. Copies of all of these documents are kept as supporting documentation for the disbursement in the voucher file. In a voucher system, a purchase requisition initiates the process for a purchase. If approved, the purchase requisition triggers the issuance of a purchase order. An invoice is received from the vendor once a purchase is made. A receiving report indicates that we actually received the goods. The invoice approval indicates that we ordered the goods, we received the goods we ordered, and that we were billed for the goods we ordered and received. The invoice approval triggers the check preparation for a valid purchase. Copies of all of these documents are kept as supporting documentation for the disbursement in the voucher file.

18. www.themegallery.com Company Logo Petty Cash System Of Control Small payments required in most companies for items such as postage, courier fees, repairs and supplies. To avoid the time and cost of writing checks for small amounts, a company set up a petty cash fund to make small payments. Sometimes, a quick disbursement is needed to be made for an immediate need. Trying to go through all of the approval processes needed to have a check prepared is too time consuming and would take too long. Companies usually keep a petty cash amount on hand to use for small, immediate needs. Sometimes, a quick disbursement is needed to be made for an immediate need. Trying to go through all of the approval processes needed to have a check prepared is too time consuming and would take too long. Companies usually keep a petty cash amount on hand to use for small, immediate needs.

19. www.themegallery.com Company Logo Operating a Petty Cash Fund Part I. Here is how a petty cash system works. The company cashier processes a check for the petty cash amount and gives it to the petty cashier. Part II. The accountant makes an entry to debit Petty Cash and credit Cash for the amount of the check. Part I. Here is how a petty cash system works. The company cashier processes a check for the petty cash amount and gives it to the petty cashier. Part II. The accountant makes an entry to debit Petty Cash and credit Cash for the amount of the check.

20. www.themegallery.com Company Logo Operating a Petty Cash Fund The petty cashier takes the check to the bank and cashes it. The cash is brought back and placed in a secure location. The petty cashier takes the check to the bank and cashes it. The cash is brought back and placed in a secure location.

21. www.themegallery.com Company Logo Operating a Petty Cash Fund As petty cash is needed, the petty cashier supplies the cash for the purchases. As petty cash is needed, the petty cashier supplies the cash for the purchases.

22. www.themegallery.com Company Logo Operating a Petty Cash Fund Receipts supporting the petty cash disbursements are given to the petty cashier.Receipts supporting the petty cash disbursements are given to the petty cashier.

23. www.themegallery.com Company Logo Operating a Petty Cash Fund When the petty cash fund is low, the petty cashier takes the receipts to the company cashier and requests a check in that amount to replenish the petty cash fund. When the check is issued, the accountant makes an entry to debit the expenses or assets indicated on the receipts and credits cash. Let’s look at a petty cash example. When the petty cash fund is low, the petty cashier takes the receipts to the company cashier and requests a check in that amount to replenish the petty cash fund. When the check is issued, the accountant makes an entry to debit the expenses or assets indicated on the receipts and credits cash. Let’s look at a petty cash example.

24. www.themegallery.com Company Logo Increasing or Decreasing a Petty Cash Fund After the petty cash fund is established, the petty cash account is not debited or credited again unless the amount of the fund is changed. Assume Z-Mart decides to increase its petty cash fund from $75 to $100 on November 27. The increase the fund amount as follows: DR Petty Cash 25 CR Cash 25 Alternatively, if Z-Mart decrease the petty cash fund from $75 to $55. DR Cash 20 CR Petty Cash 20

25. www.themegallery.com Company Logo Cash Over and Short Sometimes a petty cashier fails to get a receipt for payment or overpays for the amount due. When this occurs and the fund is later reimbursed, the petty cash payments reports plus the cash remaining will not total to the fund balance. This mistake causes the fund to be short. To illustrate, prepare the June 1 entry to reimburse a $200 petty cash fund when its payments report shows $178 in miscellaneous expenses and $15 cash remains. DR Miscellaneous Expenses 178 Cash Over and Short 7 CR Cash 185

26. www.themegallery.com Company Logo Exercise A company needs to replenish its $500 petty cash fund. Its petty cash box has $75 cash and petty cash receipts of $420. The journal entry to replenish the fund includes: a A debit to Cash for $75 b A credit to Cash for $75 c A credit to Petty Cash for $420 d A credit to Cash Over and Short for $5 e A debit to Cash Over and Short for $5

27. www.themegallery.com Company Logo Banking Activities as Controls Banks offer certain protections for your cash. For example, use of a bank account is a more secure place for your cash than a safe at the office. Signature cards are used so the bank knows whose signature is approved for use on checks. Deposit tickets provide support for deposits to your account. Checks provide authorization for disbursements from your account. Electronic funds transfers limit the number of people who have their hands on the cash and so it reduces theft and fraud. Bank statements are provided so customers can reconcile their accounts in a timely manner and notice any unusual or unauthorized activity. Banks offer certain protections for your cash. For example, use of a bank account is a more secure place for your cash than a safe at the office. Signature cards are used so the bank knows whose signature is approved for use on checks. Deposit tickets provide support for deposits to your account. Checks provide authorization for disbursements from your account. Electronic funds transfers limit the number of people who have their hands on the cash and so it reduces theft and fraud. Bank statements are provided so customers can reconcile their accounts in a timely manner and notice any unusual or unauthorized activity.

28. www.themegallery.com Company Logo Bank Statement Usually once a month, the bank sends each depositor a bank statement showing the activity in the account. Different banks use different formats for their bank statements, but all of them include the following items of information: Beginning-of-period balance of the depositor’s account. Checks and other debits decreasing the account during the period. Other debits might include bank service charges or fees, checks deposited that are uncollectible, corrections of pervious errors, withdrawals from ATM machine, and periodic payments arranged in advance by the depositor. Deposits and other credits increasing the account during the period. End-of-period balance of the depositor’s account. Different banks use different formats for their bank statements, but all of them include the following items of information: Beginning-of-period balance of the depositor’s account. Checks and other debits decreasing the account during the period. Other debits might include bank service charges or fees, checks deposited that are uncollectible, corrections of pervious errors, withdrawals from ATM machine, and periodic payments arranged in advance by the depositor. Deposits and other credits increasing the account during the period. End-of-period balance of the depositor’s account.

29. www.themegallery.com Company Logo Bank Reconciliation Anyone who has a bank account should prepare a bank reconciliation on a regular basis. If you do not, you are “banking” that the bank and you will not make any errors. And remember, humans are involved on both sides so the chances are likely that an error will occur. A bank reconciliation will identify any errors that need to be corrected by you or the bank. Why are the balances different on the bank statement and on the Cash account? Because of timing differences. Let’s look at how to prepare a bank reconciliation in more detail. Anyone who has a bank account should prepare a bank reconciliation on a regular basis. If you do not, you are “banking” that the bank and you will not make any errors. And remember, humans are involved on both sides so the chances are likely that an error will occur. A bank reconciliation will identify any errors that need to be corrected by you or the bank. Why are the balances different on the bank statement and on the Cash account? Because of timing differences. Let’s look at how to prepare a bank reconciliation in more detail.

30. www.themegallery.com Company Logo Reconciling Items Bank Statement Balance Add:Deposits in transit. (????) Deduct:Outstanding Checks (??????) Add or Deduct:Bank errors. Book Balance Add: Collections made by the bank.???? Add: Interest earned on checking account.?? Deduct: Non-sufficient funds check (NSF????). Deduct: Bank service charge.????? Add or Deduct: Book errors. There are two sides to a bank reconciliation. On the bank’s side, we will start with the balance on the bank statement and adjust it for outstanding checks, deposits in transit, and errors made by the bank. On the book’s side, we will start with the Cash balance in the ledger and adjust it for customer checks that were drawn on accounts that were nonsufficient, bank service charges, interest earned, collections made by the bank on our behalf, and errors we made. Examples of collections made by the bank on our behalf would be when the bank acts as a collection medium for customer payments or when the bank collects a note receivable for us from a customer. There are two sides to a bank reconciliation. On the bank’s side, we will start with the balance on the bank statement and adjust it for outstanding checks, deposits in transit, and errors made by the bank. On the book’s side, we will start with the Cash balance in the ledger and adjust it for customer checks that were drawn on accounts that were nonsufficient, bank service charges, interest earned, collections made by the bank on our behalf, and errors we made. Examples of collections made by the bank on our behalf would be when the bank acts as a collection medium for customer payments or when the bank collects a note receivable for us from a customer.

31. www.themegallery.com Company Logo Bank Reconciliation Two sections: Reconcile bank statement balance to the adjusted bank balance. Reconcile book balance to the adjusted book balance. The adjusted balances should be equal. When we prepare a bank reconciliation, there are two sections. In one section, we reconcile the bank statement balance to an adjusted bank balance. In the other section, we reconcile the book balance to an adjusted book balance. The adjusted balances in both sections should be equal. Now, let’s look at an example of a bank reconciliation. When we prepare a bank reconciliation, there are two sections. In one section, we reconcile the bank statement balance to an adjusted bank balance. In the other section, we reconcile the book balance to an adjusted book balance. The adjusted balances in both sections should be equal. Now, let’s look at an example of a bank reconciliation.

32. www.themegallery.com Company Logo Let’s prepare a July 31 bank reconciliation statement for the Simmons Company.  The July 31 bank statement indicated a balance of $9,610. The cash general ledger account on that date shows a balance of $7,430. Additional information necessary for the reconciliation is shown on the next screen. Bank Reconciliation Example On July 31, Simmons Company’s bank statement listed a balance of $9,610. Their Cash account had a balance on that date of $7,430. Additional information necessary for the reconciliation is shown on the next screen. On July 31, Simmons Company’s bank statement listed a balance of $9,610. Their Cash account had a balance on that date of $7,430. Additional information necessary for the reconciliation is shown on the next screen.

33. www.themegallery.com Company Logo Outstanding checks totaled $2,417. A $500 check mailed to the bank for deposit had not reached the bank at the statement date. The bank returned a customer’s NSF check for $225 received as payment on account receivable. The bank statement showed $30 interest earned during July. Check No. 781 for supplies expense cleared the bank for $268 but was erroneously recorded in our books as $240. A $486 deposit by Acme Company was erroneously credited to our account by the bank. Bank Reconciliation Example Take a minute and read over these six items before proceeding. As you read the items, determine if they are a bank reconciling item or a book reconciling item. We will discuss each one on the next slide. Take a minute and read over these six items before proceeding. As you read the items, determine if they are a bank reconciling item or a book reconciling item. We will discuss each one on the next slide.

34. www.themegallery.com Company Logo The numbers in green correspond to the numbered items on the previous slide. First, let’s start with the bank’s side. We begin with the given balance on the bank statement. To this we add deposits in transit of $500. These are deposits we made but that were not on the bank statement. Next, in item number six, the bank made a mistake and added Acme Company’s deposit to our account. As a result, we must subtract the error of $486. We also need to subtract the outstanding checks of $2,417. These are checks we have written but that had not cleared the bank by the bank statement date. After these adjustments, we arrive at an adjusted bank balance of $7,207. The numbers in green correspond to the numbered items on the previous slide. First, let’s start with the bank’s side. We begin with the given balance on the bank statement. To this we add deposits in transit of $500. These are deposits we made but that were not on the bank statement. Next, in item number six, the bank made a mistake and added Acme Company’s deposit to our account. As a result, we must subtract the error of $486. We also need to subtract the outstanding checks of $2,417. These are checks we have written but that had not cleared the bank by the bank statement date. After these adjustments, we arrive at an adjusted bank balance of $7,207.

35. www.themegallery.com Company Logo Next, we can do the book’s side. We start with the given Cash balance from the ledger. To this we add the interest we earned on our bank account of $30. In item number five, we made a recording error of $28. When we recorded check number 781, we made the entry for $28 less than the actual amount of the check. To correct this error, we need to subtract $28 from our book balance. Next, in item number three, a check we accepted from a customer turned out to be drawn on an account that did not have sufficient funds. Since when we received the check, we increased our cash balance, we now need to subtract the $225 from our cash balance. After these adjustments, we arrive at an adjusted book balance of $7,207. Let’s look at the journal entries required for this example. Next, we can do the book’s side. We start with the given Cash balance from the ledger. To this we add the interest we earned on our bank account of $30. In item number five, we made a recording error of $28. When we recorded check number 781, we made the entry for $28 less than the actual amount of the check. To correct this error, we need to subtract $28 from our book balance. Next, in item number three, a check we accepted from a customer turned out to be drawn on an account that did not have sufficient funds. Since when we received the check, we increased our cash balance, we now need to subtract the $225 from our cash balance. After these adjustments, we arrive at an adjusted book balance of $7,207. Let’s look at the journal entries required for this example.

36. www.themegallery.com Company Logo Only amounts shown on the book portion of the reconciliation require an adjusting entry. Recording Adjusting Entries From A Bank Reconciliation We only make entries for the items on the book side of the reconciliation. First, we debit Cash and credit Interest Revenue for the amount of the revenue earned. Second, we debit Supplies Expense and Accounts Receivable and credit Cash. The debit to Supplies Expense is to correct the error we made earlier. The debit to Accounts Receivable creates an account for the amount of the nonsufficient fund check the customer gave us. This debit to accounts receivable indicates that the customer has not satisfied his account. We only make entries for the items on the book side of the reconciliation. First, we debit Cash and credit Interest Revenue for the amount of the revenue earned. Second, we debit Supplies Expense and Accounts Receivable and credit Cash. The debit to Supplies Expense is to correct the error we made earlier. The debit to Accounts Receivable creates an account for the amount of the nonsufficient fund check the customer gave us. This debit to accounts receivable indicates that the customer has not satisfied his account.

37. www.themegallery.com Company Logo Recording Adjusting Entries From A Bank Reconciliation After posting the reconciling entries the cash account looks like this: After posting these entries, the balance in the Cash account is adjusted to the balance on the bank reconciliation of $7,207.After posting these entries, the balance in the Cash account is adjusted to the balance on the bank reconciliation of $7,207.

38. www.themegallery.com