The Reason for Testing the Client's Bank Reconciliation Is to Verify

question 137

Multiple Choice

The reason for testing the client's bank reconciliation is to verify whether the client's recorded bank balance is the same amount as the actual cash in bank, except for deposits in transit, checks outstanding, and other reconciling items. The information needed to complete the tests of the reconciliation is provided by the

• A) client's records and ledgers for the year under audit.
• B) cutoff bank statement.
• C) client's records and ledgers for the subsequent year.
• D) canceled checks for the year under audit.

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Definitions:

Attachment

A legal process that allows for the seizure of a defendant's property as security for the satisfaction of a judgment.

Security Interest

A legal claim or right granted by a debtor to a creditor over the debtor's property as security for a loan or obligation.

Perfection

In finance, the act of securing a priority interest in the collateral among creditors concerning the same collateral or property.

Mechanic Lien

A legal claim against a property by a contractor or repairman for unpaid work, securing payment for services rendered.