Question

Q 7.39: In a small-town retail store, the sales clerk is responsible for counting the cash in the cash register and comparing it to the cash register tape. The clerk then takes the cash and tape to the accountant, who verifies the count, prepares the deposit slip for the bank, and records the entry in the journal. Which cash receipt control is the company most in violation of with their current system

Answer 1

Answer: b.segregation of duties

Step-by-step explanation:

Segregation of duties as an internal control ensures that there are multiple people doing activities that if left to one person can leave the company at the risk of fraudulent activity. It also helps to reduce the incidence of errors in reporting because more than one person will be cross-checking transactions.

There should be more segregation of duties in this small-town retail store. For instance, the sales clerk should not be responsible for both the counting and comparison to the cash register tape because they could have omitted sales from the machine and then simply taken the money from the cash when counting. A different person should count the cash to see if it tallies with the cash register tape.