Question

In: Accounting

1. Identify the internal control weakness over cash receipts.

Evaluating internal control over cash receipts Dogtopia sells pet supplies and food and handles all sales with a cash register. The cash register displays the amount of the sale. It also shows the cash received and any change returned to the customer. The register also produces a customer receipt butkeeps no internal record of the transactions. At the end of the day, the clerk counts the cash in the register and gives it to the cashier for deposit in the company bank account.

Requirements

1. Identify the internal control weakness over cash receipts.

2. What could you do to correct the weakness?

 

Solutions

Expert Solution

Step 1: Definition of internal control over cash receipts

This method is used to control the cash receipts of the company.

Step 2:  Internal control weakness

In this, the internal control weakness is that the cash register record does not keep the internal record of the sale. The clerk counts the cash at the end of the day. Hence, this is the internal control weakness over cash receipts.

Step 3:  Way to correct the weakness

The weakness can be corrected by counting cash at the end of the day and comparing it with the cash register tape. Also, the internal record of the sale should be kept in the cash register.

Answer

Counting cash at the end of the day and comparing it to the cash register.

 

Sahil Dangi answered 2 years ago
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