Final answer:
Proper segregation of duties is illustrated by option C, where an employee prepares a list of checks received but does not record them in the general ledger. A framework of checks and balances is crucial in handling monetary transactions to avoid errors and allegations such as theft in a retail environment.
Step-by-step explanation:
Proper segregation of duties is a critical component of internal control procedures aiming to prevent errors and fraud in financial transactions. In the given options, the one representing proper segregation of duties is C. The employee who opens mail containing checks prepares a list of checks received. This is the correct option because it creates a separation between the physical custody of incoming cash (checks) and their record-keeping. The employee is merely preparing a list, which can be compared and verified by another employee who would be responsible for recording these receipts into the accounts.
Scenario: If a cashier at a retail store is confronted with a shortage in their cash drawer and labeled as a thief, the employee should handle this accusation professionally and systematically. They should request a review of all procedures and possibly the surveillance footage to see if there are any discrepancies or mistakes that could explain the short cash. It is also wise to inquire whether there has been a pattern in the shortages that could point to specific circumstances or transactions. A clear and transparent investigation process can help determine the true cause of the discrepancy and clear the employee's name if they are not responsible for the theft.