In: Accounting
I will quote the example of a cosmetics shop (retail store) in a mall. The process of making the sales and collecting payments is as follows:
- All the products in the shop have a bar code assigned to them.
- The customer chooses the desired product and heads to the billing counter.
- The authorized person at the billing counter scans the bar code and inputs the quantity. The total amount for the bill is automatically genrerated.
-The payment is made either through cash or card.
- In the cases, wherein the payment is made in cash, a separate field "cash collected" is entered on the face of the bill. Further, when the change is given to the customer" cash returned" field is entered into.
- The organization deposits the collected amounts in a safe or drawer.
-At the end of the day, the cash is tallied with cash collected-cash returned. Thus, a strong control is kept both on the cash inflow and cash outflow.