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Describe the various techniques that companies use to control cash.

The liquidity of cash makes controls over it very important to have in place.
Cash management means managing the need to have enough cash on hand to ensure cash flow needs but not so much that excess funds earn little return and may be vulnerable to misappropriation.
Bank reconciliations use third-party documents (bank statements) to reconcile differences between the amount in the bank and on the books. Done by an independent party, bank reconciliations are effective control procedures.
Petty cash funds are an effective way to minimize access to large cash accounts to pay for relatively small expenditures.

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Accounting Basics, Accounting

Category:- Accounting Basics
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