To prevent embezzlement, what can you do to protect your operation against it? a) Make bank deposits daily. b) Ensure that the individual that makes daily deposits is bonded. c) Review and approve bank statement reconciliations each month. d) All of the above e) Only a. and b. above

To prevent embezzlement, what can you do to protect your operation against it? a) Make bank deposits daily. b) Ensure that the individual that makes daily deposits is bonded. c) Review and approve bank statement reconciliations each month. d) All of the above e) Only a. and b. above

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Please answer the following 2 questions. Thank you
In the normal operation of business you receive a check from a customer and deposit it into your checking account. With your bank statement you are advised that this check for $775 is NSF. The bank also informs you that due to the amount of activity on your business account the monthly service charge is $75. During a bank reconciliation, you will: a. add both values from balance according to books. b. subtract both values from balance according to books. c. add both values from balance according to bank. d. subtract both values from balance according to bank.
Using the following information, prepare a bank reconciliation. Bank balance: $6,788 Book balance: $6,228 Deposits in transit: $1,712 Outstanding checks: $569 and $1,623 Bank charges: $50 Bank incorrectly charged the account $50. The bank will correct the error next month. Check number 2456 correctly cleared the bank in the amount of $137 but posted in the accounting records as $317. This check was expensed to Utilities Expense. Bank Reconciliation Bank Statement Balance at (date) Add: Less: Adjusted Bank Balance Book Balance at (date) Add: Less: Adjusted Book Balance
If a company made a bank deposit on September 30 that did not appear on the bank statement dated September 30, in preparing the September 30 bank reconciliation, the company should: Multiple Choice Add the deposit to the bank statement balance. Skip the bank reconciliation this month. Add the deposit to the book balance of cash. Deduct the deposit from the bank statement balance. Deduct the deposit from the September 30 book balance and add it to the October 1 book balance.
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Identify whether each of the following items would on appear on the bank side or the book side of a bank reconciliation. Enter Bank or Book below. Bank service charges Outstanding checks Deposits in transit NSF check Interest on a checking account The company properly wrote a check for $95.80 that the bank incorrectly paid as $9.58. The bank printed checks for the depositor for a fee. Bank debit memorandum Bank credit memorandum The bank collected a $1,000 note for the depositor.
Crane Company is a very profitable small business. It has not, however, given much consideration to internal control. For example, in an attempt to keep clerical and office expenses to a minimum, the company has combined the jobs of cashier and bookkeeper. As a result, Bret Turrin handles all cash receipts, keeps the accounting records, and prepares the monthly bank reconciliations. The balance per the bank statement on October 31, 2022, was $18,890.00. Outstanding checks were No. 62 for $149.00, No. 183 for $171.00, No. 284 for $262.00, No. 862 for $222.00, No. 863 for $277.00, and No. 864 for $202.00. Included with the statement was a credit memorandum of $209.00 indicating the collection of a note receivable for Crane Company by the bank on October 25. This memorandum has not been recorded by Crane. The company's ledger showed one Cash account with a balance of $22,311.00. The balance included undeposited cash on hand. Because of the lack of internal controls, Bret took for personal…
Using the reconciling items below, prepare a bank reconciliation for the September 30, 2021 year end. For every item on the bank reconciliation, explain what supporting evidence you would obtain to test the item (be specific, do not just say “look at supporting documentation”). Also, provide your conclusion – based on your bank reconciliation, is the cash balance in the client’s books correct? If not – quantify the error. 1. Cash balance per client $100,000 2. Cash balance per the bank statement $100,000 3. The company wrote mailed the following cheques on September 30, 2021, which did not get cashed until October 2, 2021. a. Cheque 1234 $2,000 b. Cheque 2345 $4,000 c. Cheque 3456…
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Assign the letter to indicate whether the following items would be added from the company's books or the bank statement during the construction of a bank reconciliation. Clear All Charges for some other company's safe deposit box were posted to your account A $1,000 note from one of Added to the bank your customers was statement balance collected by the bank Added the company's Interest revenue earned by books the note above EFT deposit from a customer
explain why it is important for a business to do a bank reconciliation monthly.