Question

Using bank reconciliation to determine cash receipts stolen

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 undetermined 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	$11,670
Cash according to the October 31, 20Y3, bank statement	14,640
Outstanding checks as of October 31, 20Y3	4,060
Bank service charge for October	30
Note receivable, including interest collected by bank in October	2,290

No deposits were in transit on October 31.

1. Determine the amount of cash receipts stolen by the sales clerk. Round your answer to the nearest dollar.

   $  fill in the blank 2

2. What accounting controls would have prevented or detected this theft?

Answer 1

ANSWER

a)

Cash Balance as per the Bank Statement	$ 14,640
Outstanding Checks	$ (4,060)
Adjusted Balance	$10,580
Cash Balance as per the books	$11,670
Note collected by Bank, including Interest	$2,290
Bank Service Charges	$(30)
Adjusted Balance	$13,930
Amount Stolen	$3,350

b)

Daily reconciliation and two or person being in the same task would have detected or prevented this.

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