Stained Glass Crafters performs all work on account, with regular monthly billing to customers. M. C. Perry,
Question:
Stained Glass Crafters performs all work on account, with regular monthly billing to customers. M. C. Perry, the accountant, opens the mail. Company procedure requires him to separate customer checks from the remittance slips and then post collections to customer accounts. Perry deposits the checks in the bank. He computes each day's total amount posted to customer accounts and matches this total to the bank deposit slip. This procedure is intended to ensure that all receipts are deposited in the bank.
Requirement
As a consultant hired by Stained Gilass Crafters, 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. Use the memo format that follows.
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