Richard Has a Checking Account at the Fourth National Bank

question 25

Essay

Richard has a checking account at the Fourth National Bank.He receives his monthly statement on the fifteenth of every month.On March 15 he receives his statement for the previous month.Because he is busy,he glances at it and then sets it aside.Two weeks later he examines it more carefully and discovers a forged check in the amount of $500 that the bank has paid.What should Richard do? Who has responsibility for the forged check?

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Definitions:

Ending Work

The work in process inventory that is yet to be completed at the end of an accounting period.

Process Inventory

Inventory that consists of items that are in the production process but have not yet been completed.

Cost System

An accounting system designed to capture, measure, and allocate costs associated with the production of goods or provision of services.

Equivalent Units

A concept in cost accounting used to convert partially completed goods into the equivalent of a full finished unit for inventory valuation.