In sales controls, which step ensures receipts are recorded by two people and banked promptly with bank reconciliation?

In sales controls, which step ensures receipts are recorded by two people and banked promptly with bank reconciliation?

• A. Order
• B. Despatch
• C. Receipt
• D. Invoicing

Answer: (C)

The step dealing with cash receipts is where the control is applied. When receipts are received, they are recorded by two people (segregation of duties) and the cash is banked promptly. The bank deposits then enter the bank, and this money is reconciled against the cash book through a bank reconciliation to ensure the amounts match and any discrepancies are spotted. This combination of dual recording, prompt banking, and reconciliation is what protects cash from misappropriation and errors. Other stages in the sales process—ordering, despatching goods, and invoicing—do not involve handling cash receipts or the banking process, so they don’t implement these cash-control safeguards.

The step dealing with cash receipts is where the control is applied. When receipts are received, they are recorded by two people (segregation of duties) and the cash is banked promptly. The bank deposits then enter the bank, and this money is reconciled against the cash book through a bank reconciliation to ensure the amounts match and any discrepancies are spotted. This combination of dual recording, prompt banking, and reconciliation is what protects cash from misappropriation and errors.

Other stages in the sales process—ordering, despatching goods, and invoicing—do not involve handling cash receipts or the banking process, so they don’t implement these cash-control safeguards.