The auditor is testing a bank reconciliation that was prepared by the client. To test...
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Accounting
The auditor is testing a bank reconciliation that was prepared by the client. To test the "balance per the bank" the strongest procedure the auditor can perform is to
- A. compare the balance to a bank statement the client has on hand.
- B. make inquiries of client personnel.
- C. agree the balance with the client's general ledger.
- D. obtain a confirmation directly from the bank.
The auditor is testing a bank reconciliation that was prepared by the client. "Deposits in transit" represent
- A. none of the above.
- B. deposits at or near year-end that the client made to the bank, but for which the bank hasn't yet credited the client's bank account.
- C. deposits made by customers that the client hasn't received yet.
- D. deposits in transit from one client location to another client.
The auditor is testing a bank reconciliation that was prepared by the client. "Outstanding checks" represent
- A. interesting checks in terms of the amount or nature of the check.
- B. checks written by the client that were accidentally recorded twice.
- C. checks written by the client that have not yet cleared the bank as of the date of the reconciliation.
- D. an accounting term that does not warrant specific testing by the auditor.
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