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(b)
The following is written in the answer
Each restaurant maintains a petty cash float of 400 and at any point in time the receipts and funds present should equal the float. It has been noted by the internal audit department that on occasions there are differences
The following control recommendation is given
On a weekly basis, the restaurant manager should reconcile the petty cash and if any receipts are missing these should be followed u with the relevant employee. If it is cash which his missing then this should be investigated further with the employees who made petty cash purchases during that periodHow is petty cash reconciled
If it is cash that is missing then why should this be investigated with the employee.
“receipts and funds present should equal the float” is describing an imprest system – this is assumed knowledge of FA and outlined at the bottom of page 99 of our notes.
If physical cash + authorised vouchers does not = 400, something has gone wrong (!) and must be investigated.
IMAGINE … you ask an office junior to buy some snacks for an office meeting – you give them $30. They return with snacks and a till receipt for $18 and $7 cash. With whom would you investigate the missing $5 if not the office junior?
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