Each of the following describe internal control related to cash receipt or cash payment situations.

a. Perfect Beauty Shop buys beauty products from suppliers and sells them to end customers. The store manager, Betty, is responsible for contacting suppliers for the purchase of merchandise inventory required. She is the only person who takes delivery of the merchandise inventory from suppliers. As per the store’s policy, Betty makes cash payment to suppliers after receiving the inventory.

b. Cindy is a mailroom clerk at One-Stop Solutions, a company that provides information technology solutions to its clients. At One-Stop Solutions, cash receipts arrive by mail. Cindy opens envelopes and separates cash receipts for the day from the accompanying remittance advices. Cindy forwards the checks to the cashier who makes the daily bank deposit. Cindy sends the remittance advices, which show cash received, to the accounting department for posting credits to the respective customer accounts.

c. Amelie is an accountant at Healthy Foods Company. It is the company’s policy that cash received by mail goes directly to Amelie who journalizes the transaction to record the cash collection from customers by debiting cash and crediting accounts receivable. Amelie also deposits the cash in the company’s bank account.

d. Simon is the supervisor of a big retail store. As per the store’s policy, Simon raises the purchase requisition based on which the purchase department purchases inventory.
The storekeeper records receipt of stock and hands over the stock to Simon. Receipts are sent by the purchase manager to the accounting department for reimbursement.

e. Danny is a manager at one of the five stores of Dress Up Company. The company’s policy requires managers of each store to request for merchandise inventory needed for the stores. The company purchases the merchandise inventory and has them delivered to the stores.
Requirements 

1. Identify whether the internal controls are strong or weak in each situation and explain your answer.
2. Based on your answer in requirement 1

• identify the potential problem caused by each control weakness;
• identify the potential benefit in situations where the internal controls are strong.