Assume that a store collects cash every day, and records the amount. It then sends an employee to deposit the money in the bank. The employee steals some of the money, and deposits the rest. (True or false) A company that carefully prepares bank reconciliations will be likely to discover that this kind of theft is occurring.

Question

Quizplus · Accepted Answer

By preparing bank reconciliations, the company will compare the recorded cash deposits in their books with what is actually deposited in the bank. If there is a discrepancy between the two amounts, it will raise a red flag and prompt further investigation. Therefore, it is likely that the theft will be discovered through the bank reconciliation process.

Assume That a Store Collects Cash Every Day, and Records