Question

11 - 11 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 does not keep an internal record of the sale.
the clerk counts the cash in the cash draw at the end of the day.

requirement 2. what could you do to correct the weakness?
in order to prevent the weakness, the following could be put into place (only complete the necessary input fields.)

Explanation:

1. For the internal - control weakness: The lack of an internal record in the cash register means there's no automatic audit - trail for sales transactions. Also, having the clerk who handles cash throughout the day count the cash at the end creates a risk of misappropriation and lack of independent verification.
2. To correct the weakness: Install a cash - register system that automatically records sales internally. Have an independent person (e.g., a supervisor or an auditor) count and reconcile the cash at the end of the day.

Answer:

1. Internal control weaknesses:

• The cash register does not keep an internal record of the sales, leaving no automatic audit - trail.
• The clerk who handles cash counts the cash at the end of the day, lacking independent verification.

1. Corrective measures:

• Install a cash - register system that internally records all sales transactions.
• Have an independent individual (not the clerk) count and reconcile the cash at the end of the day.