Seacrest Productions makes all sales on credit.Cash receipts arrive by mail. Brian Padgitt, the mailroom clerk,opens the envelopes and seperates 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. Padgitts only other duty is to grant sales allowance to customers. (A sales allowance decreases the customer's account receivable.) When Padgitt receives a customer check for $ 550 less a $ 60 sales allowance, he records the sales allowance and forwards the document to the accounting department.

Requirements;

1. Identify the internal control weakness in this situation

2. Who should record sales allowances?

3.What is the amount that should be shown in the ledger for cash receipts?

Requirement 1. Identify the internal control weakness in this situation