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There is no asset with higher inherent risk of theft than cash. Because of this it is important to have strong internal controls in place to protect cash receipts and payments. Lets start by looking at the controls over cash receipts over the counter. When companies sell goods for cash over the counter like in a retail setting they are at risk of theft. In order to prevent this they use the following control procedures: Receipts are issued for each transaction, this creates electronic paper trail of how much cash was received at the register. At any point the actual cash on hand can be compared to the receipt record to see if they are in balance. Without receipts a customer could buy the goods and the cashier never rings up the order and just pockets the cash. If you ever see a fast food restaurant with a sign that says something like, your meal is free if you didnt get a receipt, youll know this is why they are doing that, to make sure their cashiers are ringing up every order.
