CA Inter P5 · Chapter 3 · Question 7 of 13
In Vritika Stores Pvt. Ltd., the cashier who receives cash from customers also posts entries to the customers' ledger accounts. This arrangement is weak because it:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Combines custody of assets with recording of transactions, allowing misappropriation to be concealed
Explanation
Effective segregation of duties separates authorisation, recording and custody of assets. A cashier who also maintains the customer ledger can misappropriate receipts and conceal it by manipulating ledger entries, for example through teeming and lading. The weakness lies in combining custody with recording.
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