A proof of cash
A) Is required by GAAS.
B) Can be used to test the transactions process.
C) Is most helpful when control risk for cash is low.
D) Always detects lapping.

Question

Quizplus · Accepted Answer

A proof of cash is a reconciliation of the bank statement to the cash balance in the accounting records. It helps to test the accuracy and completeness of recorded cash transactions and identify any discrepancies. Therefore, it can be used to test the transactions process. It is not required by GAAS, and its effectiveness does not depend on the level of control risk for cash. While a proof of cash may detect lapping, it is not always the case.

A Proof of Cash