27th Edition
WARREN + 5 others
ISBN: 9781337272094




27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

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 salesclerks count the cash in their respective cash drawers, after which they determine the amount recorded by the cash register and prepare me 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. a. Indicate the weak link in internal control.
  2. b. How can the weakness be corrected'


To determine

Internal Control: Internal control refers to the policies, and plans of the business organization along with other measures with a view to safeguard its assets, encourage the employees to adhere to the plans, to improve on the operational efficiency, and to ensure correct and reliable accounting information. Internal control is a process which ensures continuous reliability of accomplishment of a company’s objectives, related to operations, financial reporting, and in conformity with laws and regulations.

The following are the some of the internal control procedures:

  • Competent personnel, rotating duties, and mandatory vacations
  • Separating responsibilities for related operations
  • Separating operations, custody of assets, and accounting
  • Proofs and security measures

To state: The weak link in the internal control.


The company’s sales clerk should not ...


To determine
Ways to correct the weakness.

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