Each situation below describes an internal control weakness in the cash receipts process. Identify which of the five internal control principles is violated, explain the weakness, and then suggest a change that would improve internal control.
a. Cashiers prepare a cash count summary, attach tapes from the cash register showing total receipts, and then prepare a bank deposit slip, which they take to the bank for deposit. After the deposit is made, all documents are forwarded to the accounting department for review and recording.
b. The receptionist opens the mail each morning, sorts it into piles, and then gives checks received from customers to the mail clerk for delivery to the accounting department, where a cash receipts list is prepared.
c. The accounting department receives cash register totals each day and promptly files them by cash register number. The accounting department also receives cash count sheets from cashiers each day and files them by employee number. The accounting department receives stamped bank deposit slips the morning after the bank deposit is made, prepares the journal entry, and files the deposit slips by date.
d. To avoid boredom, the employee who works the cash register at the movie theater trades off with either the employee who collects the tickets or an employee who works at the concessions stand.
e. To enhance efficiency, cashiers are assigned the responsibility of authorizing price changes at the cash register.

  • CreatedNovember 02, 2015
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