Receipts from Customers

Receipt of cash from the customers against price of good sold are checked with the counterfoils of receipt issued to them. At the same time, it is also verified that there is a system of internal check in operation which acts as a safeguard against amounts collected being misappropriated. One of the common devices for misappropriating cash collections from customers is the one known as Teeming and Lading. Such a fraud, usually, remains undetected for long since the cashier is able to make good the amounts misappropriated before the cash balance is checked. At times, the cashier who has committed such a fraud may cover up the amounts misappropriated, raising a fictitious debit in an expense account.
When such a fraud is suspected, the first step in its investigation should be making comparison of the entries of amounts deposited in the bank account with those on counterfoils of the Pay-in-Slip Book. If the composition of the deposits is different from that shown on the counterfoils of the Pay-in-Slip Book, it would be a prima facie evidence of the fact that the amounts collected were not deposited as soon as these were received. Another evidence of the existence of such a fraud can be the fact that debits in customers’ accounts, which ought to have collected in whole, are cleared in small instalments. If such an evidence exists, the matter should be investigated further. This can be done all the customers being requested to send statements of account from their books, for the period during which the fraud is suspected to have been in progress. On comparing items in each statement, with the entries in the customer’s accounts, it would be possible to locate amounts which were not deposited on the day these were collected, but subsequently.

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