During the preparation of the bank reconciliation for Buildi

During the preparation of the bank reconciliation for Building Concepts Co., Joel Kimmel, the assistant controller, discovered that Lone Peak National Bank incorrectly recorded a $3,290 check written by Building Concepts Co. as $329. Joel has decided not to notify the bank but wait for the bank to detect the error. Joel plans to record the $2,961 error as Other Income if the bank fails to detect the error within the next three months.

Discuss whether Joel is behaving in a professional manner.

Solution

Joel is not behaving in a professional manner,

Joel record differece amount ($2961) as other income, this treatment is wrong

because that amount can not be include in income of Building concepts Co.