Question

Jim Heary is the custodian of petty cash. Jim, who is short of personal cash, decided to pay his home electrical and phone bills from petty cash. He plans to pay it back next month. Do you feel Jim should do so? You make the call. Write down your specific recommendation to Jim.

Answer 1

Answer: Yes, Jim should pay back the money he used for his electric and phone bill. Since he is the custodian of petty cash for the company it is his responsibility to account for the money. The petty cash should only be used for work related expenses. The company could ask for an audit and Jim could get fired because there no record of the cash being given out for company expenses. Jim should put an IOU in the petty cash drawer and explain why it was taken out. Jim should also speak with one of the managers of the department to explain about the missing petty cash.