Consider each of the following situations.
A. Sales clerks in aretail store are assigned to a specific cash register. They aregiven a cash drawer containing $100 in change at the beginning oftheir shifts. They are required to record the amount of eachpurchase in the cash register. The cash register records anidentification and price for each item purchased. Cash payments arecollected from customers and placed in the cash drawer. A copy ofthe cash register sales slip is given to the customer. At the endof the shift, the employee takes the cash drawer and cash registertape to a supervisor who counts the cash, verifies the sales, andsigns an approval form. The sales clerk also signs the form thatidentifies the amount of cash and amount of sales for theday.
B. A ticketseller at a movie theater is issued a cash drawer with $100 inchange and a roll of renumbered tickets when the theater opens eachday. The seller collects cash from customers and issues thetickets. Each customer hands a ticket to a ticket taker who tearsthe ticket in half and gives half back to the customer. At the endof the day, the ticket seller returns the cash drawer and ticketsto a supervisor.
Required: For each situation, discuss why the proceduresare used and how they provided effective internal control.