Question

In order to prevent the weakness, the following could be put into place:

a.A manager counts the cash drawer at the end of the day and compares it to the register tape.
b.The cash register will keep an internal record of the sale.
c.The register take will go to the accounting department to record the cash and sale in the journals.

Answer 1

The question pertains to the implementation of internal controls to prevent cash handling weaknesses in a business. Methods include having a manager count the cash drawer against the register tape, the cash register keeping an internal sales record, and the register tape going to accounting for journal entries. Proper adherence to these control procedures helps in managing cash transactions and maintaining trust in the business.

Step-by-step explanation:

The student's question relates to internal controls that can be put in place to prevent cash handling weakness. Specifically, the student is asking about the efficacy of different methods to ensure the accuracy and safety of cash transactions in a business setting. Here's how these prevention techniques can be applied in a retail scenario

• A manager counting the cash drawer and comparing it to the register tape ensures accountability and serves as a double-check against the recorded sales.
• The cash register maintaining an internal sales record helps in reconciling sales data and provides an additional audit trail.
• The register tape going to the accounting department for journal entry ensures that there is a segregation of duties, minimizing the risk of fraud or errors.

If a cashier's drawer has been consistently short, it is crucial for them to document their transactions meticulously, communicate with management about possible errors or discrepancies, and follow the established protocol for handling cash. This involves ensuring that all transactions are recorded correctly, that they balance their cash drawer at the end of the day, and if discrepancies continue, requesting that management review surveillance and processes to ascertain the cause of the shortfall.

To effectively manage cash and avoid the negative repercussions that come with mismanagement or theft accusations, it is important for all employees to adhere to the procedures set by the business. This includes balancing checkbooks, understanding the role of banks in the economy, and the trust placed in employees who handle cash transactions.