Question

You oversee the $250 petty cash for your company. When an employee needs a special item that is not in inventory, you take money from petty cash to purchase that item.

One day, you are short on cash for lunch. You decide to borrow $10 each day for the next 3 days until payday for a total of $30 from petty cash. After payday, you do not have enough to repay petty cash, so you decide to record a cash short/over expense of $30.

Respond to the following in a minimum of 175 words:

Since this is the first time you have ever done this, is this a problem? If so, what steps should be taken to fix this problem? If not, why not?

Answer 1

Answer:

This action is unethical as there will be no special part has bought against $30 and the fact was not disclosed to any other authorized person. Whatever his intentions were, the action seems unethical. By recording the transaction as cash short means that actual expenses were exceeded from $250 and that is a misrepresentation. he(you given in the question) would have to deposit the differential amount of $30 to offset the difference and record another correcting entry.