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Principles of Internal Control
Establish responsibility
Maintain adequate records
Insure assets and bond key employees
Sperate recordkeeping from custody assets
Divide responsibility fro related transactions
Apply technological controls
Perfrom regular and independen reviews
Cash Over and Short: Overage
Cash Debit
Cash Over and Short Credit
Sales Credit
Cash Over and Short: Shortage
Cash Debit
Cash Over and Short Debit
Sales Credit
Petty Cash: Increase
Petty Cash Debit
Cash Credit
Petty Cash: Decrease
Cash Debit
Petty Cash Credit
Bank Balance Readjustments
+ Deposits In Transit
- Outstanding Checks
± Bank Errors
Deposit in Transit
Deposits made and recorded in the depositor’s book but not yet listed on the bank statement
Outstanding Checks
Checks written by the depositor, subtracted on the depositors books, and sent to the payees but not yet turned in for payment
Book Balance Readjustments
+ Collections and interest earned
- Bank Free and NSF Checks
± Book Errors
Day sales uncollected
Day sales uncollected = (Accounts receivable/Net Sales) * 365
Note 
Flashcard (22)