Pendley Productions makes all sales on credit. Cash receipts arrive by mail. Larry Padgitt in the mailroom opens envelopes and separates the checks from the accompanying remittance advices. Padgitt forwards the checks to another employee, who makes the daily bank deposit but has no access to the accounting records. Padgitt sends the remittance advices, which show cash received, to the accounting department for entry in the accounts. Padgitt's only other duty is to grant sales allowances to customers. (A sales allou'ance decreases the amount receivable.) When Padgitt receives a customer check for less than the full amount of the invoice, he records the sales allowance and forwards the document to the accounting department.

Requirements 

You are a new employee of Pendley Productions. Write a memo to Paulette Pendley, owner of the business, identifying the internal control weakness in this situation. State how to correct the weakness.