Reconciling bank accounts is a good way to help maintain internal controls over cash. With time lags and posting errors it is easy for cash transactions to be omitted recorded in a different accounting period or reflect incorrect amounts. This assignment with give you practical experience in reconciling the cash balance as noted on the company books to the bank’s records.
Assignment Steps
Resources: Financial Accounting: Tools for Business Decision Making
Scenario: Daisey Company is a very profitable small business. It has not however given much consideration to internal control. For example in an attempt to keep clerical and office expenses to a minimum the company has combined the jobs of cashier and book-keeper. As a result Bret Turrin handles all cash receipts keeps the accounting records and prepares the monthly bank reconciliations.
The balance per the bank statement on October 31 2017 was $18380. Outstanding checks were No. 62 for $140.75 No. 183 for $180 No. 284 for $253.25 No. 862 for $190.71 No. 863 for $226.80 and No. 864 for $165.28. Included with the statement was a credit memorandum of $185 indicating the collection of a note receivable for Daisey Company by the bank on October 25.
This memorandum has not been recorded by Daisey.
The company’s ledger showed one Cash account with a balance of $21877.72. The balance included undepositied cash on hand. Because of the lack of internal controls Bret took for personal use all of the undeposited receipts in excess of $3795.51. He then prepared the following bank reconciliation in an effort to conceal his theft of cash:
Prepare a 1050-word bank reconciliation report (hint: deduct the amount of the theft from the adjusted balance per books) including the following:
Show all work in the Excelspreadsheet andsubmitwith the reconciliation report.

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