Identify the cause for only a few outstanding checks listed on the client’s December 31 reconciliation cleared in a January 10 cutoff bank statement.

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Chapter 23, Problem 15.1MCQ

To determine

Identify the cause for only a few outstanding checks listed on the client’s December 31 reconciliation cleared in a January 10 cutoff bank statement.

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The following are misstatements that might be found inthe client’s year-end cash balance (assume that the balance sheet date is June 30):1. The outstanding checks on the June 30 bank reconciliation were underfooted by$2,000.2. A loan from the bank on June 26 was credited directly to the client’s bank account.The loan was not entered as of June 30.3. A check was omitted from the outstanding check list on the June 30 bank reconciliation. It cleared the bank July 7.4. A check was omitted from the outstanding check list on the bank reconciliation. Itcleared the bank September 6.5. Cash receipts collected on accounts receivable from July 1 to July 5 were includedas June 29 and 30 cash receipts.6. A bank transfer recorded in the accounting records on July 1 was included as adeposit in transit on June 30.7. A check that was dated June 26 and disbursed in June was not recorded in the cashdisbursements journal, but it was included as an outstanding check on June 30.a. Assuming that each of…

A table for a monthly bank reconciliation dated September 30 is given below. For each item 1 through 12, indicate whether the item should be added to or subtracted from the book or bank balance, and whether it should or should not appear on the reconciliation. (Select the answers in the appropriate cells. Leave no cells blank. Be certain to select "NA" in fields which are not applicable.) Item 1. Checks written by another depositor but mistakenly charged against this company's account. 2. Bank service charge for September is not yet recorded by the company. 3. Checks outstanding on August 31 that cleared the bank in September. 4. NSF check from a customer is shown on the bank statement but not yet recorded by the company. 5. Interest earned on the September cash balance in the bank is not yet recorded by the company. 6. Deposit made on September 5 and processed by the bank on September 6. 7. A note receivable is collected by the bank for the company, but it is not yet recorded by the…

Auditors 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…