ExV-23 Using bank reconciliation to determine cash receipts stolen Obj. 2,3,5 Al

Question

ExV-23 Using bank reconciliation to determine cash receipts stolen Obj. 2,3,5 Alaska Impressions Co. records all cash receipts on the basis of its cash register tapes. Alaska Impressions discovered during October 20Y3 that one of its sales clerks had stolen an unde- termined amount of cash receipts by taking the daily deposits to the bank. The following data have been gathered for October: Cash in bank according to the general ledger Cash according to the October 31, 20Y3, bank statement Outstanding checks as of October 31, 20Y3 Bank service charge for October Note receivable, including interest collected by bank in October $11,680 13,275 3,670 40 2,100 No deposits were in transit on October 31. A. Determine the amount of cash receipts stolen by the sales clerk. B. What accounting controls would have prevented or detected this theft?

Explanation / Answer

Answer a. Cash Balance according to Bank Statement    13,275.00 Less: Outstanding Checks    (3,670.00) Adjusted Balance      9,605.00 Cash Balance according to General Ledger    11,680.00 Add: Note Collected by Bank, including Interest      2,100.00 Less: Bank Service charges          (40.00) Adjusted Balance    13,740.00 Amount Stolen ($13,740 - $9,605)      4,135.00 Answer b. The theft of the cash receipts can be prevented by: 1. By deploying more than one person to deposit daily cash deposit. 2. By deploying two independent person, one for depositing cash and one for making entry in accounting records. 3. Daily reconciliation of cash deposit with the cash receipts and if there is any diffrence, the reason for the same should be recorded in the books

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