The information below was taken from the bank transfer schedule prepared during the audit of Fox Co.'s financial statements for the year ended December 31, 20X1. Assume all checks are dated and issued on December 30, 20X1. Which of the following checks illustrate deposits/transfers in transit at December 31, 20X1?

Question

Quizplus · Accepted Answer

Choice "B" is correct. A deposit in transit is a disbursement recorded in one accounting period with the receipt occurring in the subsequent period. Assuming all checks were dated and issued on December 30 20X1, any deposits with a receipt date in 20X2 would indicate a deposit in transit at December 31, 20X1. Checks #101 and #303 both meet this criterion and therefore illustrate deposits/transfers in transit at December 31, 20X1. Choices "A", "C", and "D" are incorrect, based on the above Explanation.

The Information Below Was Taken from the Bank Transfer Schedule