Bogoda Industries makes all sales on account. Ian Holt, accountant for the company, receives and opens incoming mail. Company procedure requires Holt to separate customer checks from the remittance slips, which list the amounts that Holt posts as credits to customer accounts receiv¬able. Holt deposits the checks in the bank. At the end of each day, he computes the day's total amount posted to customer accounts and matches this total to the bank deposit slip. This procedure ensures that all receipts are deposited in the bank.
Requirement
1. As a consultant hired by Bogoda Industries, write a memo to management evaluating the company's internal controls over cash receipts from customers. If the system is effective, identify its strong features. If the system has flaws, propose a way to strengthen the controls.