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gageNOWv2 | Online teach X https://2.cengagenow.com/iln/takeAssignment/takeAssignmentMain.do?invo ts, register for.... Writing a Position Paper 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 cderks 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 $8,930 20,630 5,895 25 Cash according to the October 31, 20Y3, b ank statement Outstanding checks as of October 31, 20Y3 Bank service charge for October Note receivable, including interest collected by bank in October 9,555 No deposits were in transit on October 31. a. Determine the amount of cash receipts stolen by the sales derk. 8,840X b. What accounting controls would have prevented or detected this theft? separation of duties.

Solution

Amount stolen By Sales Clerk Can be Obtained by Bank Reconciliation:

Bank Reconciliation

In bank Reconciliation Starts with Balance as per bank statement as it is more reliable and adjust for any Amount not reflected in bank so as to find Corrected balance.

_ Here Outstanding Cheques: Cheque Written by bank but not withdrawn from Account(May underprocess or supplier didn\'t given to bank).Deduct it from bank because in ledger we did deducted it.

Deposit in transit:Is the opposite We deposited some amont but not reflected in Bank(May be in night depository).

And We get Corrected bank that is the right amount in bank should be.

Here.

Service Charge: Which is deducted by bank is nt updated in our ledger. So deduct

Add: Interest and Receivables Collected by bank Some payment by customers for their payable and Bank Interest may not be there in our Ledger.

Amount Stolen

The diffence Between Corrected Balance for Bank statement and General Ledger will reflect the amount Stolen.

Ie, Amount stolen= 18,460 - 14,735 =3,725

2)Detect And Prevent Theft

The Threat of steal money from Cash receipt can be prevented by havine more than one person deposting Money to bank account. It will reduce the threat of money being Stolen.

Segregation of duty, It should be one person who deposit money in bank and another one recording daily bank deposits.

Balance As per Bank	20,630
Less:Outstanding Checks	(5,895)
Add:Deposit Intransit	NIL
Corrected Balance	14,735