Internal Controls for Cash Received from Retail Sales Dunn Company operates a retail department store. Most...

Internal Controls for Cash Received from Retail Sales Dunn Company operates a retail department store. Most customers pay cash for their purchases. Edwards has asked you to help it design procedures for processing cash received from customers for cash sales. Briefly describe the procedures that should be used in each of the following departments:

a. Retail sales departments

b. Retail sales supervisor

c. Treasurer’s department

d. Controller’s department

Solutions

Expert Solution

Procedures for processing cash received from customers for cash sales:

a. Retail Sales Department: Retail Sales Department needs to be builded which will prepare and keep record of all cash receipts as soon as the cash is received. Generally cash thefts happens before the record is made of receipts. With proper maintenance of record tracing theft is easier.

b. Retail sales supervisor: Retail sales supervisor is required for deposit the cash amount received as soon as possible. It is preffered to deposit cash on same day otherwise next working day. undeposited cash is generally more suspectible to be misutilised.

c. Treasurer’s department: Treasurer's department is required to arrange and deligate duties and responsibilities to employee who manage cash receipts and check that they do record the receipts in the accounting records. This control process follows the general principle of segregating the work of collector and entry maker to cross check the things.

d. Controller’s department: Controller's department is required to arrange duties of employees so that the employee who are receiving the cash is not disbursing the cash. This control process can be implemented in small organisation too.

ekkarill92 answered 1 year ago

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