Question

h & h sells pet supplies and food and handles all sales with a cash register. the cash register displays the amount of the sale. it also shows the cash received and any change returned to the customer. the register also produces a customer receipt but keeps no internal record of the transactions. at the end of the day, the clerk counts the cash in the register and gives it to the cashier for deposit in the company bank account.

requirements

1. identify the internal control weakness over cash receipts
2. what could you do to correct the weakness?

requirement 1. identify the internal control weakness over cash receipts
the following are the weaknesses in internal control (only complete the necessary input fields )

the cash register displays the amount of sale.
the cash register displays the change to be returned to the customer.
the cash register does not keep an internal record of the sale.
the cash register produces a customer receipt.
the clerk counts the cash in the cash draw at the end of the day.

Explanation:

1. The lack of an internal record in the cash - register means there is no independent verification of transactions. This can lead to errors or fraud going undetected as there is no way to cross - check the clerk's count of cash at the end of the day with a pre - recorded transaction amount.
2. To correct this, implementing a system where the cash register records each sale internally (either electronically or on a paper tape that is retained) would create a reliable audit trail. This would allow for reconciliation between the cash in the drawer and the recorded sales amounts.

Answer:

Requirement 1: The cash register does not keep an internal record of the sale.
Requirement 2: Install a system that records each sale internally in the cash register, such as an electronic log or a paper tape that is retained for auditing purposes.