Question

When cash is received by mail, a list should be prepared with copies sent to all of the following:

Answer 1

A detailed cash receipts list should be created when receiving cash by mail for internal control purposes and should be distributed to key departments like accounts receivable, accounting, and possibly others, like internal auditing, to ensure proper tracking and reconciliation.

Step-by-step explanation:

When cash is received by mail, it is a best practice in cash handling procedures to prepare a list detailing the amounts and sources of the cash received. This list, often referred to as a cash receipts log or remittance list, should be accompanied by copies which are distributed to key departments within the organization to ensure proper internal control and to facilitate the reconciliation process. Typically, the copies of the cash receipts list should be sent to:

• The accounts receivable department, for updating customer accounts and tracking outstanding balances.
• The accounting department, for recording the receipt in the general ledger and ensuring that the funds are deposited in a timely manner.
• Other relevant departments or individuals, such as the internal auditor or the department that provided the goods or services, for independent verification and recordkeeping.

Each of these departments uses the information for their specific purposes, contributing to the accuracy and integrity of the company's financial reporting.

Answer 2

When cash is received by mail, a list should be prepared with copies sent to:

• the record keeper
• the person who opened the mail with
• the money to the cashier

1. The record keeper: The record keeper is responsible for maintaining financial records and ensuring the accuracy of the organization's financial transactions. Providing them with a copy of the list allows for proper documentation and reconciliation with the organization's financial records.

2. The person who opened the mail: This individual is often the first point of contact for incoming cash. Sharing a copy of the list with them ensures that the funds received match the recorded amounts and enhances accountability at the initial stage of handling incoming cash.

3. The money to the cashier: The cashier is responsible for physically handling and depositing the cash into the organization's bank account. Providing them with a copy of the list ensures that the funds are properly accounted for and reduces the risk of mishandling or misplacement during the transfer process.