Loose-leaf For Auditing & Assurance Services: A Systematic Approach
11th Edition
ISBN: 9781260687637
Author: William F Messier Jr, Steven M Glover Associate Professor, Douglas F Prawitt Associate Professor
Publisher: McGraw-Hill Education
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Question
Chapter 16, Problem 16.16MCQ
To determine
Concept Introduction:
Auditor’s duty is to vouch the cheques dated after year end to outstanding cheques listed on year end bank reconciliation to cut off statement.
To choose: The correct option on receiving the cut off statement what an auditor needs to vouch
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Students have asked these similar questions
On receiving the bank cutoff statement, the auditor should trace:
a. Deposits in transit on the year-end bank reconciliation to deposits in the cash receipts journal.
b. Checks dated prior to year end to the outstanding checks listed on the year-end bank reconciliation.
c. Deposits listed on the cutoff statement to deposits in the cash receipts journal.
d. Checks dated subsequent to year end to the outstanding checks listed on the year-end bank reconciliation.
Bank reconciliations are normally prepared on a monthly basis to identify adjustments needed in the depositor's records and to identify bank errors. Adjustments on the part of depositor should recorded for
a. outstanding checks and deposits in transit
b. Bank error, outstanding checks, and deposits in transit
c. Book errors, bank errors, deposits in transit, and outstanding checks
d. all items except bank errors, outstanding checks, and deposits in transit.
Which procedure is an auditor most likely to use to detect a check outstanding at year-end that was not recorded as outstanding on the year-end bank
reconciliation?
Multiple Choice
Prepare a bank transfer schedule using the client's cash receipts and cash disbursements journal.
Receive a cutoff bank statement directly from the client's bank.
Prepare a four column bank reconciliation using the year-end bank statement.
Confirm the year-end balance using the standard form to confirm account balance information with financial institutions.
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Chapter 16 Solutions
Loose-leaf For Auditing & Assurance Services: A Systematic Approach
Ch. 16 - Prob. 16.1RQCh. 16 - Prob. 16.2RQCh. 16 - Prob. 16.3RQCh. 16 - Prob. 16.4RQCh. 16 - Prob. 16.5RQCh. 16 - Prob. 16.6RQCh. 16 - Prob. 16.7RQCh. 16 - Prob. 16.8RQCh. 16 - Prob. 16.9RQCh. 16 - Prob. 16.10RQ
Ch. 16 - Prob. 16.11RQCh. 16 - Prob. 16.12MCQCh. 16 - Prob. 16.13MCQCh. 16 - Prob. 16.14MCQCh. 16 - Prob. 16.15MCQCh. 16 - Prob. 16.16MCQCh. 16 - Prob. 16.17MCQCh. 16 - Prob. 16.18MCQCh. 16 - Prob. 16.19MCQCh. 16 - Prob. 16.20MCQCh. 16 - Prob. 16.21MCQCh. 16 - Prob. 16.22MCQCh. 16 - Prob. 16.23MCQCh. 16 - Prob. 16.24PCh. 16 - Prob. 16.25PCh. 16 - Prob. 16.26PCh. 16 - Prob. 16.27PCh. 16 - Prob. 16.28PCh. 16 - Prob. 16.29PCh. 16 - Prob. 16.30P
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Similar questions
- The bank reconciliation revealed that one deposit had cleared the bank two weeks after the date of the deposit. Should this be of concern? Why, or why not?arrow_forwardWhich of the following items are found on a book side of the bank reconciliation? A. beginning bank balance B. outstanding checks C. interest income D. error made by bankarrow_forwardPrepare the journal entry required to reconcile the book balance to the bank balance.arrow_forward
- On receiving the bank cutoff statement, the auditor should trace:arrow_forwardwhen auditing a client's year end cash balance, an auditor uses standard bank confirmations and performs tests on the clients year end bank reconciliations. These substantive procedures test which of the following assertions? a. understandability of presentation and classification b. cutoff c. completeness and valuation and allowance d. rights and obligations, and occurencearrow_forwardAuditors typically will find the items lettered A–F in a client-prepared bank reconciliation. Check the below image for client-prepared bank reconciliation - Required:Assume these facts: On October 11, the auditor received a cutoff bank statement dated October 7. The September 30 deposit in transit; the outstanding checks 1281, 1285, 1289, and 1292; and the correction of the bank error regarding check 1282 appeared on the cutoff bank statement.a. For each of the preceding lettered items A–F, select one or more of the following procedures 1–10 that you believe the auditor should perform to obtain evidence about the item. These procedures may be selected once, more than once, or not at all. Be prepared to explain the reasons for your choices.1. Trace to cash receipts journal.2. Trace to cash disbursements journal. 3. Compare to the September 30 general ledger.4. Confirm directly with the bank.5. Inspect bank credit memo.6. Inspect bank debit memo.7. Ascertain reason for unusual delay, if…arrow_forward
- A journal entry would need to be made for which of the following adjustments on a bankreconciliation?a. Bank service chargesb. Outstanding checksc. Deposits in transitd. Bank error to be corrected by the bankarrow_forwardWhich of the following is an effective audit procedure that an auditor might use to detect kiting between intercompany banks?a. Review the composition of authenticated deposit slips.b. Review subsequent bank statements.c. Prepare a schedule of the bank transfers.d. Prepare a year-end bank reconciliation.arrow_forwardThe adjusting entries for a bank reconciliation Select the correct response: May include a debit to office expense for bank service charge. May include a credit to accounts receivable for an NSF customer check. Are taken from the "balance per bank" section only. May include a debit to accounts payable for an NSF customer check.arrow_forward
- When preparing a bank reconciliation statement, outstanding checks would: a. increase the cash balance according to the bank statement. b. deduct the cash balance according to the bank statement. c. increase the cash balance according to the company statement. d. deduct the cash balance according to the company statement.arrow_forwardA1) Which of the following would the auditor most likely perform when auditing the bank reconciliation for a December 31 year-end audit? a. Confirm the audit client’s book balance shown on the bank reconciliation directly with the bank. b. Verify the audit client’s book balance shown on the bank reconciliation to the Cash balance in the audit client’s trial balance and general ledger. c. Subtract the outstanding check amounts from the audit client’s book balance. d. Verify the deposits in transit amounts to the audit client’s December bank statement.arrow_forwardThe following reconciling items are applicable to the bank reconciliation for the Spahn Company. Select whether each of the following items would be added to the book balance, deducted from the book balance, added to the bank balance, or deducted from the bank balance. a. Outstanding checks. Added to the Book BalanceAdded to the Bank BalanceDeducted from the Book BalanceDeducted from the Bank Balance b. Bank credit memorandum for collecting a note for the depositor. Deducted from the Bank BalanceAdded to the Bank BalanceAdded to the Book BalanceDeducted from the Book Balance c. Bank debit memorandum for service charge. Added to the Bank BalanceDeducted from the Book BalanceDeducted from the Bank BalanceAdded to the Book Balance d. Deposit in transit.…arrow_forward
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