Question

What are internal control functions performed by a cash register and point-of-sale system? How are these functions performed when cash is received by mail?

Answer 1

Internal control system for cash register

Although businesses vary their specific procedures for controlling cash receipts, they usually observe the following principles:

• Prepare a record of all cash receipts as soon as cash is received. Most thefts of cash occur before a record is made of the receipt. Once a record is made, it is easier to trace a theft.
• Deposit all cash receipts intact as soon as feasible, preferably on the day they are received or on the next business day. Undeposited cash is more susceptible to misappropriation.
• Arrange duties so that the employee who handles cash receipts does not record the receipts in the accounting records. This control feature follows the general principle of segregation of duties given earlier in the chapter, as does the next principle.
• Arrange duties so that the employee who receives the cash does not disburse the cash. This control measure is possible in all but the smallest ccompanies.

Internal control functions performed by a pos system.

Inventory management: When a pos is installed the chances of misappropriation of stock by employees and customers gets reduced.

Security: The company doesn't have to handle ,process,and store hard cash as the transfer of money takes place digitally.

Accounting : Some advanced pos systems can perform all the major accouting functions on its own like issuing invoice , reducing the inventory, recording of sale on real time basis, Accouting for relevant taxes and paying the same all at once.

When cash is received by mail there are employees who are authorized for opening the mail and recording such transactions. To improve security there are supervisors who supervise the whole process and the cash received is counted by such supervisor to reduce the chances of any misappropriation.