Internal Control of Cash Receipts: The procedures used for over-the-counter receipts are as...

Question:

Internal Control of Cash Receipts

The procedures used for over-the-counter receipts are as follows. At the close of each day's business, the sales clerks count the cash in their respective cash drawers, after which they determine the amount recorded by the cash register and prepare the memo cash form, noting any discrepancies. An employee from the cashier's office counts the cash, compares the total with the memo, and takes the cash to the cashier's office.

1. Identify the weak link in internal control.

  • a. The sales clerk should not have access to the cash register tapes.
  • b. An employee from the treasurer's office takes the cash to the cashier's office.
  • c. The sales clerk should have access to the cash register tapes.
  • d. An employee from the cashier's office counts the cash and compares the total with the memorandum.

2. Who should remove the cash register tapes from the register?

  • a. The company president.
  • b. An employee from the cashier's office.
  • c. A teller from the bank.
  • d. The accounts payable clerk.

Business Departments:

Business departments refer to the different divisions within the organization that helps to manage the business activities effectively as each division has its specific work and responsibilities to handle. The business department may include the operations department, marketing department, and so on.

Answer and Explanation:

1. *a. The sales clerk should not have access to the cash register tapes.

Explanation:

Here the weak link is when the sales clerk himself removes the cash register tapes from the register as it may lead to unlawful activity attempts by the sales clerk, and that cannot be recognized as record also prepared by the sales clerk.

2. *b. An employee from the cashier's office.

Explanation:

An employee should remove the cash register tapes from the cash register as it will reduce the fraud activities of the staff members as the authority is provided to two different people, which makes all the transactions transparent.


Learn more about this topic:

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