Following is a bank reconciliation for Zocar Enterprises for June 30, Year 2: Cash Bank Account Statement Balance as of 6/30/Year 2 Deposit in transit Outstanding checks Note collected by bank Bank service charge $24,330 $21,555 4,750 (485) 2,075 (35) (550) NSF check Adjusted cash balance as of 6/30/Year 2 $25,820 $25,820 As part of the normal process for handling an NSF check, the accounting clerk has notified the customer that their account did not contain sufficient funds to pay the balance owed to the company. The customer was told that they will need to provide an alternativ form of payment to cover the outstanding balance. Required a. Prepare the adjustment that the clerk would have made to record the NSF check. c. Assume the clerk had stolen $550 cash, and recorded an entry for a nonexistent NSF check to reduce the cash balance so that it would match the bank balance. Select the internal control practice that would have most likely prevented this fraud.
Following is a bank reconciliation for Zocar Enterprises for June 30, Year 2: Cash Bank Account Statement Balance as of 6/30/Year 2 Deposit in transit Outstanding checks Note collected by bank Bank service charge $24,330 $21,555 4,750 (485) 2,075 (35) (550) NSF check Adjusted cash balance as of 6/30/Year 2 $25,820 $25,820 As part of the normal process for handling an NSF check, the accounting clerk has notified the customer that their account did not contain sufficient funds to pay the balance owed to the company. The customer was told that they will need to provide an alternativ form of payment to cover the outstanding balance. Required a. Prepare the adjustment that the clerk would have made to record the NSF check. c. Assume the clerk had stolen $550 cash, and recorded an entry for a nonexistent NSF check to reduce the cash balance so that it would match the bank balance. Select the internal control practice that would have most likely prevented this fraud.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Following is a bank reconcillation for Zocar Enterprises for June 30, Year 2:
Cash
Bank
Account Statement
Balance as of 6/30/Year 2
Deposit in transit
Outstanding checks
Note collected by bank
Bank service charge
$24,330
$21,555
4,750
(485)
2,075
(35)
(550)
NSF check
Adjusted cash balance as of 6/30/Year 2
$25,820
$25,820
As part of the normal process for handling an NSF check, the accounting clerk has notified the customer that their account did not
contain sufficient funds to pay the balance owed to the company. The customer was told that they will need to provide an alternative
form of payment to cover the outstanding balance.
Required
a. Prepare the adjustment that the clerk would have made to record the NSF check.
c. Assume the clerk had stolen $550 cash, and recorded an entry for a nonexistent NSF check to reduce the cash balance so that it
would match the bank balance. Select the internal control practice that would have most likely prevented this fraud.
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