To aid in detecting cash larceny, who should make the bank deposit?

• A. The cashier
• B. The accounts receivable clerk
• C. A person independent of cash receipts and accounts receivable
• D. The vendor

Answer: (C)

Separating cash handling from recordkeeping is essential to deter and detect cash theft. The bank deposit should be made by someone who is independent of cash receipts and accounts receivable because this creates an impartial check in the cash flow. When the person who handles receipts or posts them to customer accounts isn’t also responsible for depositing funds, opportunities for skimming cash are reduced, and discrepancies can be caught during reconciliation more reliably. The cashier directly handles cash receipts and would have an opportunity to misappropriate funds if they also made deposits. The accounts receivable clerk is involved in recording and processing receipts, so having them deposit funds could conceal irregularities in the records. The vendor is external and not part of the internal control process.