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 $12,760 Cash according to the October 31, 20Y3, bank statement 13,850 Outstanding checks as of October 31, 20Y3 3,890 Bank service charge for October 50 Note receivable, including interest collected by bank in October 2,210 No deposits were in transit on October 31. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet

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

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

Answer 1

A)	Bank Reconciliation statement	$
	Cash in Bank According to General Ledger	12760
	Add Cheque issued but not debited	3890
		16650
	Less Bank charges deducted by bank but not entered in General Ledger	2210
	Balance	14440
	Balance as per Bank statement	13850
	Cash Receipt stolen by sales clerk	590

B. Each counter foil of cash deposit made by the clerk should be checked by the concerned Accounts in charge who is responcible for it. Also need to check the Bank stamp on the counter foil. This way we can avoid such type of theft. Nowadays we can check the same through online banking also.