Ramona's Clothing is a retail store specializing in women's clothing. The store has established a liberal return
Question:
This year, returns at Ramona's Clothing have reached an all-time high. There are a large number of returns under $75 without receipts.
a. How can sales clerks employed at Ramona's Clothing use the store's return policy to steal money from the cash register?
b. What internal control weaknesses do you see in the return policy that make cash thefts easier?
c. Would issuing a store credit in place of a cash refund for all merchandise returned without a receipt reduce the possibility of theft? List some advantages and disadvantages of issuing a store credit in place of a cash refund.
d. Assume that Ramona's Clothing is committed to the current policy of issuing cash refunds without a receipt. What changes could be made in the store's procedures regarding customer refunds in order to improve internal control?
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Related Book For
Accounting
ISBN: 978-1285743615
26th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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