Question

Just before lunch, Sunil, a petty cashier, responsible for the petty cash book was asked by his manager for $30 from petty cash, because he needed to buy some groceries and had no time to get the necessary cash from his bank. To account for this, the manager suggested that Sunil record an entry for office window-cleaning in the petty cash book to match the money taken. They both knew that the window cleaner would be visiting the following morning, and always charged $30 for his work. Therefore, the manager could draw $30 from his bank account that evening, and replace the cash before the window cleaner requested payment. Sunil agreed to comply with his manager’s request. What do you think about this?

Answer 1

Answer:yes

Explanation:

This is called as creative accounting where an accountant can manipulate transactions. But according to the accounting rules, every transaction should be clearly mentioned. So the cashier can record this as ‘withdrawal for personal use’ instead of window cleaning expenses.

Answer 2

Answer:

Lack of Honesty

Explanation:

Although the manager is only ‘borrowing’ the cash, this is really an example of misappropriation and false accounting, and involves a lack of honesty (or integrity) on the part of both the manager and Sunil. Sunil has not challenged the manager about the appropriateness of ‘borrowing’ business funds for private purposes, but has made a false entry in the petty cash book in order to conceal the manager’s wrongdoing.