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Strong internal controls are necessary to prevent mishandling of funds and safeguard assets. They protect both the University and the employees handling the cash. Safeguarding Cash Link
Recording Cash Receipts Link
Reconciliation Link
Segregation of Duties LinkNo one person should be allowed to collect, handle or transport and deposit checks/currency without some additional control feature to ensure that all funds are accounted for. Examples of such controls are as follows:
Gifts/Personal Checks Link
Related SU policy: Gift Acceptance Policy Fees and other Revenues LinkUse an accounts receivable account to process billing and collection for routine revenue activities. If you are unsure if a cash receipt should be recorded as revenue or an offset to an expense, contact General Accounting in the Comptroller’s Office for assistance. Internal controls surrounding this type of activity include:
Related SU policy: Revenue from Transactions with External Parties Bank Accounts LinkThe opening of any University bank account requires proper approval.
Related SU policy: Bank Accounts Who is the one responsible for the authorization of writeWrite-offs must be authorized by company field sales employees who are in a position to determine the financial standing of the customers. A. Write-offs must be approved by a responsible officer after review of credit department recommendations and supporting evidence.
What is writeA write-off is an elimination of an uncollectible accounts receivable recorded on the general ledger.
When a specific account receivable is written off the entry?When a specific customer's account is identified as uncollectible, the journal entry to write off the account is: A credit to Accounts Receivable (to remove the amount that will not be collected) A debit to Allowance for Doubtful Accounts (to reduce the Allowance balance that was previously established)
How does writeUnder the allowance method, a write‐off does not change the net realizable value of accounts receivable. It simply reduces accounts receivable and allowance for bad debts by equivalent amounts.
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