Question

Question: Applying internal control over cash receiptsSandra Kristof sells furniture for McKinney Furniture Company. Kristof has financial problems and takes $650 that she received from a customer. She rang up the sale through the cash register. What will alert Megan McKinney, the controller, that something is wrong?

Answer 1

Step 1: Definition of control over cash receipts

It is a method of internal control that records all the cash receipts in the sale register. In this, method of the internal all the cash receipts are firstly recorded into the cash register and then the amount of the cash is sent to the cash clerk who records it and collects it.

Step 2: Alert if something is wrong

The internal control to alert McKinney is cash receipts over the counter because in this rule all the cash receipts are recorded in the sale register. In this case, the cash receipts are not recorded in the sale register hence this will alert the controller.

Cash receipts over the counter alert the controller.