Question

Format Tools Table Window Help Internal Control (3) Saved to my MARS Mailings Review View Tell me el Aalbode Aabende References A Аа А A AaBbCcDc ABCDE Aa Heading 2 Normal No Spacing T |t) After comparing cash register tapes with inventory records, the accountant for Teri's Treats for Tots is concerned that someone at one of the stores is not recording some of that store's cash sales and is stealing the cash from the unreported sales. a) Explain why a comparison of sales and inventory records would reveal a situation in which cash sales are not being recorded and cash from those sales is being stolen. b) Describe how an employee might be able to steal cash from sales. c) Describe how a customer that pays cash at the store could help make the theft more difficult. d) List at least five internal control procedures would you recommend to make the theft more difficult Inited States - Focus ctv MacBook Air

Answer 1

1 a. on comparison of sales and inventory will the situation of stolen cash,if cash are being stolen the sales book will decrease but cash book will not increase in accordance.

b. Point of Sale fraud is where an employee steals money from their employer at the point in the business where a sale is made. Employees may steal money as it passes to or from a customer (through a sale or a return of goods by the customer). Point of Sale fraud usually occurs in retail businesses where there the high number of low value transactions and numerous sales people, making the fraud easier to hide.

There are two major types of Point of Sale fraud. Both result in the theft of monies from the business.

• The first targets sales transactions where customers pay money to the business
• The second targets returns of goods, where money passes from the business to the customer
• .

c. customer can help the store could make the theft more difficult by accepting original bill from cash counter, which will make sure that cashier will make entry in books .

d. An effective internal control structure for inventory includes a company’s plan of organization and all the procedures and actions it takes to:

• Protect its assets against theft and waste.
• Ensure compliance with company policies and federal law.
• Evaluate the performance of all personnel to promote efficient operations.
• Ensure accurate and reliable operating data and accounting report.

2.