By Preparing a Four-Column Bank Reconciliation ("Proof of Cash")for the Last

question 60

Multiple Choice

By preparing a four-column bank reconciliation ("proof of cash") for the last month of the year,an auditor will generally be able to detect:

• A)An unrecorded check written at the beginning of the month which was cashed during the period covered by the reconciliation.
• B)A cash sale which was not recorded on the books and was stolen by a bookkeeper.
• C)An embezzlement of unrecorded cash receipts on receivables before they had been deposited into the bank.
• D)A credit sale which has been recorded twice in the sales journal.

---

Definitions:

Owner's Equity

The residual interest in the assets of a business after deducting liabilities, representing the owner's claim on the company's assets.

Withdrawal

A withdrawal refers to the act of removing funds from a bank account, investment, or trust.

Expense

Expense refers to the outflow of money or other assets, incurred in the process of generating revenue, including costs like rent, salaries, and utilities.

Expenses

Costs incurred in the process of generating revenues, including operating costs, taxes, and interest payments.