Q 7.28: A multi-location flower shop receives payment from customers in person, over the Internet, and through the mail. When checks come in the mail, the mail clerks send the checks to the cashier’s department and a list of checks to the accounting department. What is the primary reason the company engages in this practice?

The reason for such practice is to ensure the chance for perpetrating fraud is eliminated.

Explanation:

The cash internal control set by the company is to ensure that cash of the business is not stolen,since cash receipt is a high fraud area,every attempt must be made at ensuring that accurate cash is accounted by segregating the duty for cash collection and cash receipt recording.

In smaller firms,a representative of the team handing cash and the accounting department would have to be present when mails containing cash are to be opened such that one counts and the other takes appropriate record of the cash received.

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