Herbert and Evita are planning to open a quick copy center near the local college. They will make both cash and credit sales. They will hire college students to make copies and to operate the cash register. Either Herbert or Evita will act as manager
during most hours that the business will be open. One student will be designated as assistant manager when they cannot be present. Describe procedures that Herbert and Evita might use to provide adequate internal control over cash and credit sales and bank deposits.
The following procedures should be considered by Herbert and Evita to control cash and credit sales and bank deposits:
(a) All sales should be recorded on prenumbered sales slips. Separate types of forms should be used for cash and credit sales.
(b) On the cash sales slips, the quantity, price, and amounts should be recorded.
(c) Separate cash register keys should be used for cash and credit sales.
(d) The number of employees allowed to operate the cash register should be limited. If possible, separate cash drawers should be used for each cash register operator.
(e) The cash register tape should be reconciled with the cash, the cash sales slips, and the credit sales slips each day.
(f) Herbert and Evita should try to be the only ones who can make bank deposits.
(g) Herbert and Evita should observe that employees follow the procedures they establish for control over cash and credit sales.
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