Prosperity Pty Ltd is a growing business owned and managed by former University friends, Lee, Lydia, and Lakshmi. The business deals in sports products including shoes, rackets, and jerseys.

As Lee took an Accounting elective during their university days, below are some of the internal control procedures that Lee helped to put in place at Prosperity Pty Ltd:

1. Receipts are issued for all cash sales. However, to minimize cost, the receipts are not pre-numbered. Also, Lydia, who is always friendly with the customers, while issuing the original receipts to customers hardly care to fill a copy of the receipts.

2. As Lee is the only partner who took Accounting unit at university, all the partners assigned Lee with the tasks of (i) opening the cash received by mail from credit customers, (ii) depositing the cash at the end of the working days and (iii) recording the receipts and the deposits in their newly installed accounting system.

3. Lee recommended Lakshmi and she was formally assigned (i) to keep cash payment journals for the business and (ii) to prepare the monthly bank reconciliation. Lakshmi has enthusiastically assumed these responsibilities since last Winter.

Required:

Identify any TWO strengths and THREE weaknesses of the internal controls at Prosperity Pty Ltd.