Which of the following misstatements could be detected as part of the tests of a bank reconciliation?

Question

Quizplus · Accepted Answer

Deposits recorded as cash receipts at the end of year but included as outstanding deposits (deposits in transit) would cause a difference between the balance per bank statement and balance per company's records, which would be detected during the bank reconciliation process. Payments of interest to a related party at an incorrect rate, exclusion of mortgage interest receivable from the balance sheet, and defalcation of cash by interception of collections before they are recorded would not be detected as part of the bank reconciliation process.

Which of the Following Misstatements Could Be Detected as Part