In November,two months before year-end,the bookkeeper erroneously recorded the receipt of a one year bank loan with a debit to cash and a credit to interest revenue.The most effective method for detecting this type of error is:

Question

Quizplus · Accepted Answer

Sending a bank confirmation as of year-end would effectively detect the error because it involves directly confirming the bank balances and loan amounts with the bank, which would reveal the discrepancy caused by incorrectly recording the loan as interest revenue.

In November,two Months Before Year-End,the Bookkeeper Erroneously Recorded the Receipt