Chapter 10
Cash Controls
319
Review Exercise 1
JP has been running his dry cleaning business, called Clean 4U, since he purchased it last year. It
is a small business with eight employees. He has run into some difficulty with his business. His
cash flow has declined every month, but he is as busy as last year.
Every single order has its own multiple-part receipt: the office gets a copy, the cash drawer gets
a copy, and the customer gets a copy when they pay.The customer gets a ticket stub as part of
the receipt based on their first and last name only.The garments get tagged and matched to the
receipt to get processed and returned to the receipt.
The company has only a cash drawer to accept cash payments.The drawer does not lock, and the
cash cannot be locked away when the business is closed. Cash is deposited when large quantities
of cash are on hand.The company uses a manual point-of-sale (POS) terminal to accept debit
and credit payments and the counter clerk must enter the dollar amount before the customer can
complete the transaction.
Recently, JP discovered a small pile of cash-drawer receipts in the garbage while he was cleaning
the storefront. He knows that many of the customers are regulars and always pay cash.The
counter clerk has been committing fraud and has been stealing cash.
What recommendations should be made with respect to cash controls for a company this size?
What is the overall goal for cash controls? What recommendations should be made for Clean 4U
in general?
See Appendix I for solutions.
