Meridian Hockey distributes merchandise to sporting goods stores and hockey shops. All sales are on credit, so virtually all cash receipts arrive in the mail. Business has tripled in the last year, and the owner, Frank Meridian, has hired an accountant to manage the financial aspect of the business. Meridian has requested that strong internal controls over cash receipts and receivables be the first priority.
Required
Assume you are Kiley Kilpatrick, the new accountant. Write a memo to Frank Meridian outlining the internal controls you intend to establish for Meridian Hockey. Assume also that you have two employees in the accounting department and a receptionist who report to you. Use this format for your memo:
Date: __________________
To: Frank Meridian
From: Kiley Kilpatrick, Accountant
Re: Proposed internal controls over cash receipts and receivables