Which of the following misstatements would normally be discovered as part of the audit of the bank reconciliation?
A) cash received by the client subsequent to the balance sheet date but recorded as cash receipts in the current year
B) deposits recorded as cash receipts near the end of the year, deposited in the bank in the same month and included in the bank reconciliation as a deposit in transit
C) payments on loans debited directly to the bank account but not entered in the client's records
D) all of the above

Question

Quizplus · Accepted Answer

The audit of the bank reconciliation is designed to identify discrepancies between the company's records and the bank's records. It would uncover cash received but improperly recorded in the current year (A), deposits in transit that have been recorded but not yet cleared by the bank (B), and direct debits for loan payments that have not been recorded in the client's books (C).

Which of the Following Misstatements Would Normally Be Discovered as Part