Financial Accounting (12th Edition) (What's New in Accounting)
12th Edition
ISBN: 9780134725987
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Question
Chapter 4, Problem 4.12S
To determine
Whether the cash has been stolen, and the amount stolen, and mention the side on which the true cash balance is reported
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Students have asked these similar questions
The owner of Zeke's Landscaping Designs just hired an office manager to handle all the office functions for him. Among other responsibilities, the office manager will handle key accounting functions such as processing customer payments, writing cheques to employees to pay the payroll, handle daily bank deposits at the bank pay suppliers, and reconcile the company bank account bank reconciliations. What internal cash control practice is being overlooked by the owner?
Multiple Choice
A Making daily cash deposits
B Frequent preparation of bank reconciliations
C Separation of cash payment from cash disbursement function
D Ensuring all cash disbursements are tracked by making payments by cheque
E Performing external audit
XYZ LLC dealing all its transactions through its bank to avoid employee fraud and theft. For offering daily services,the bank debited OMR 20 to the bank account and the company unaware it.How will you adjust the above reconciliation item in bank reconciliation statement?
a. Add OMR 20 to the company's bank statement balance
b. Add OMR 20 to the company's cash book balance
c. Deduct OMR 20 from company's cash book balance
d. Deduct OMR 20 from the company's cash book balance
Select a company with which you are familiar and describe the internal controls that you are aware of within the company. For example, if you go through the drive-through at a McDonald's the total cost of your meal is presented for you to see before you pay. The purpose of this control would be to help ensure that the cashier did not ring up one amount and tell you a different (higher) figure pocketing the difference.
What is the purpose of preparing a bank reconciliation? How often should one be prepared? Who should not prepare one? Why?
Chapter 4 Solutions
Financial Accounting (12th Edition) (What's New in Accounting)
Ch. 4 - Prob. 1QCCh. 4 - Prob. 2QCCh. 4 - Prob. 3QCCh. 4 - Prob. 4QCCh. 4 - Prob. 5QCCh. 4 - Prob. 6QCCh. 4 - Prob. 7QCCh. 4 - Why does cash require some specific internal...Ch. 4 - Prob. 9QCCh. 4 - Prob. 10QC
Ch. 4 - Prob. 11QCCh. 4 - Prob. 12QCCh. 4 - Prob. 4.1ECCh. 4 - Prob. 4.1SCh. 4 - Prob. 4.2SCh. 4 - (Learning Objective 2: Describe objectives and...Ch. 4 - Prob. 4.4SCh. 4 - (Learning Objective 2: Explain the objectives and...Ch. 4 - (Learning Objective 3: Evalue internal controls...Ch. 4 - Prob. 4.7SCh. 4 - Prob. 4.8SCh. 4 - Prob. 4.9SCh. 4 - Prob. 4.10SCh. 4 - Prob. 4.11SCh. 4 - Prob. 4.12SCh. 4 - Prob. 4.13SCh. 4 - Prob. 4.14SCh. 4 - Prob. 4.15AECh. 4 - Prob. 4.16AECh. 4 - Prob. 4.17AECh. 4 - Prob. 4.18AECh. 4 - Prob. 4.19AECh. 4 - Prob. 4.20AECh. 4 - Prob. 4.21AECh. 4 - Prob. 4.22BECh. 4 - Prob. 4.23BECh. 4 - Prob. 4.24BECh. 4 - (Learning Objectives 1, 2, 3: Describe fraud and...Ch. 4 - Prob. 4.26BECh. 4 - Prob. 4.27BECh. 4 - Prob. 4.28BECh. 4 - Prob. 4.29QCh. 4 - Prob. 4.30QCh. 4 - Prob. 4.31QCh. 4 - Prob. 4.32QCh. 4 - Prob. 4.33QCh. 4 - Prob. 4.34QCh. 4 - Prob. 4.35QCh. 4 - Prob. 4.36QCh. 4 - Prob. 4.37QCh. 4 - Prob. 4.38QCh. 4 - Prob. 4.39QCh. 4 - Prob. 4.40QCh. 4 - Prob. 4.41APCh. 4 - Prob. 4.42APCh. 4 - Prob. 4.43APCh. 4 - Prob. 4.44APCh. 4 - Prob. 4.45BPCh. 4 - (Learning Objectives 2, 3: Explain the objectives...Ch. 4 - (Learning Objective 3: Evaluate internal controls)...Ch. 4 - Prob. 4.48BPCh. 4 - Prob. 4.49CEPCh. 4 - Prob. 4.50CEPCh. 4 - Prob. 4.51SCCh. 4 - Prob. 4.52DCCh. 4 - Prob. 4.53DCCh. 4 - Prob. 4.54EICCh. 4 - Prob. 1FFCh. 4 - Prob. 1FA
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
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- You are the auditor for Konerko’s Office Supply Store, which is opening for business next week. The store owner has established all the controls you have recommended for ensuring that sales are recorded properly and cash is accounted for. The owner has heard from other small business owners that employees often used returned goods as means of skimming money from the register. a. How might an employee use returned goods to skim money from the register? b. What controls would you recommend to prevent or detect fraudulent returns? c. What audit procedures might you perform to detect fraudulent returns?arrow_forwardYou are the auditor for Konerko’s Office Supply Store, which is opening for business next week. The store owner has established all the controls you have recommended for ensuring that sales are recorded properly and cash is accounted for. The owner has heard from other small business owners that employees often used returned goods as means of skimming money from the register.Required:a. How might an employee use returned goods to skim money from the register?b. What controls would you recommend to prevent or detect fraudulent returns?c. What audit procedures might you perform to detect fraudulent returns?arrow_forwardTo 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. abovearrow_forward
- Discuss the importance of a company having proper insurance and bonding its employees. What is the purpose of preparing a bank reconciliation? There are three employees in the accounting department: payroll clerk, accounts payable clerk, and accounts receivable clerk. Which one of these employees should not make the daily deposit? The balance of Cash is likely to differ from the bank statement balance. What two factors are likely to be responsible for the difference?arrow_forwardSome strategies in management can use to implement controls to ensure the integrity and existence of the client's cash balances. Reconciling cash can be a great control in most cases since receipts tie to deposits so it's accurate and cash exists since it hits the bank account. Now reconciling on a daily basis is important as well but would you be able to negotiate the cash box if the employee was using a lapping fraud to steal money? If they took $100 of cash and issued a manual receipt to the customer then used the next $100 to come in to clear the AR from the first customer on the cash receipt system, wouldn't I still reconcile? What could I do as a manager to prevent this type of fraud from occurring?arrow_forwardIdentity Theft Resource Center (ITRC) provides consumer and victim support, public education, and advice. Marlena's grandmother is concerned her identity has been stolen. Help Marlena reconcile her grandmother's checkbook and bank statement. The checkbook reflects a balance of $1,245. The bank statement shows a balance of $207. Notes collected were $100 and $210. The bank charged a $25 service fee. Outstanding checks were Number 255, $985; Number 261, $233; and Number 262, $105. There is a deposit in transit of $2,646. Prepare your bank reconciliation.arrow_forward
- What is wrong in the following scenario?Jack O.A. Trade is an accountant is a small enterprise. Aside from keeping the books and preparing the financial statements, he is also in charge of removing and counting the cash from the cash register at the end of each day; comparing the cash with the duplicate sales slips used for recording cash sales; and depositing the cash with the enterprise' depository bank the next banking day. His duties also include releasing checks to the suppliers which he could sign in the absence of the owner and preparing the bank reconciliation statement at the end of each month.arrow_forwardDuring the preparation of the bank reconciliation for Apache Grading Co., Sarah Ferrari, the assistant controller, discovered that Rocky Spring Bank incorrectly recorded a $610 check written by Apache Grading Co. as $160. Sarah has decided not to notify the bank but wait for the bank to detect the error. Sarah plans to record the $450 error as Other Income if the bank fails to detect the error within the next three months. Discuss whether Sarah is behaving in a professional manner.arrow_forwardIdentity Theft Resource Center (ITRC) provides consumer and victim support, public education, and advice. Marlena's grandmother is concerned her identity has been stolen. Help Marlena reconcile her grandmother's checkbook and bank statement. The checkbook reflects a balance of $1,425. The bank statement shows a balance of $363. Notes collected were $220 and $330. The bank charged a $85 service fee. Outstanding checks were No. 255, $1,165; No. 261, $437; and No. 262, $705. There is a deposit in transit of $3,834. Prepare your bank reconciliation. Checkbook balance Add: Notes collected Subtotal Deduct: Service fee Reconciled balance $ $ GA BANK RECONCILIATION 1,440 570 2,010.00 90 $ $ $ 376 3,933 4,309 1,920arrow_forward
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