1.A customer walks into a Simba store and wants to purchase a loaf of bread. The customer selects the bread to purchase, its price is 1,800 RWF.
2.The customer makes a payment with a 2,000 RWF bill to the store clerk, who provides 200 RWF in change.
3.The store clerk issues a receipt to the customer, automatically through a POS system.
4.At the end of the day, the store manager collects all cash and receipts, and compares the cash total to the receipt total.
Qs: What control activity is done at each step?
- Documentation
- Segregation of duties, independent check
5.The store manager deposits the cash at Equity Bank and receives a deposit slip.
6.The store manager provides the receipts and deposit slip to the accountant who reconciles the balance.
7.If the cash and the receipts agree, the accountant records a journal entry to recognize revenue. If differences exist, the manager and accountant must investigate.
Qs: What control activity is done at each step?
- Documentation
- Segregation of duties, independent check
Note: Revenue should actually be recognized as soon as the purchase is made and cash received, however for simplicity and efficiency, typically done at the end of the day