S1: Bank reconciliation is important because it is an opportunity to check for fraudulent activity and to prevent financial statement errors. S2: Cash set aside for a particular purpose may be classified as current or non-current depending on the purpose for its establishment. S3: A cash short or over account is debited when the petty cash fund proves out short. S4: If there is a bank overdraft, it is necessary to adjust and create a bank overdraft account in the ledger. a. All statements are correct. b. All statements are incorrect. c. Only two statements are correct. d. Only one statement is correct. e. Only one statement is incorrect.
S1: Bank reconciliation is important because it is an opportunity to check for fraudulent activity and to prevent financial statement errors. S2: Cash set aside for a particular purpose may be classified as current or non-current depending on the purpose for its establishment. S3: A cash short or over account is debited when the petty cash fund proves out short. S4: If there is a bank overdraft, it is necessary to adjust and create a bank overdraft account in the ledger. a. All statements are correct. b. All statements are incorrect. c. Only two statements are correct. d. Only one statement is correct. e. Only one statement is incorrect.
Auditing: A Risk Based-Approach to Conducting a Quality Audit
10th Edition
ISBN:9781305080577
Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg
Chapter10: Auditing Cash And Marketable Securities
Section: Chapter Questions
Problem 31MCQ
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S1: Bank reconciliation is important because it is an opportunity to check for fraudulent activity and to prevent financial statement errors. S2: Cash set aside for a particular purpose may be classified as current or non-current depending on the purpose for its establishment. S3: A cash short or over account is debited when the petty cash fund proves out short. S4: If there is a bank overdraft, it is necessary to adjust and create a bank overdraft account in the ledger.
a. All statements are correct.
b. All statements are incorrect.
c. Only two statements are correct.
d. Only one statement is correct.
e. Only one statement is incorrect.
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