Question

In the audit of the R.T. Company a large branch that maintains its own bank account, cash in periodically transferred to the central account in Cedar Rapids. On the branch account's records, bank transfers are recorded as a debit to the home office clearing account and a credit to the branch bank account. Similarly, the home office account is recorded as a debit to the central bank account and a credit to the branch office clearing account. Gordon Light is the head bookkeeper for both the home office and the branch bank accounts. Because he also reconciles the bank account, the senior auditor, Cindy Marintete, is concerned about the internal control deficiency. As a part of the year end audit bank transfer, Cindy Marintete asks you to schedule the transfer for the last few days in 2013 and the first few days of 2014. You prepare following list :

Answer 1

Ansus The audttor should tace hdeposits in tansit to tte Cut olslatrnert provided by the bank as shaon on the last coluny in Each of the bank tianeftr larts all the cash > Afkr dthe neus Ye tei pts not deposided n tk bank til -the laot day dr the End should be traced to the aurtot bank stakoment -to are depositd chotly encure +ha न। Lali cash eccipls and sh in rant in he i culside -the poevieo dte kept new a must CuTed bank etonbialion odashog The cntrics rguired in-tde home oftice (Horuoyds Ladit Parlicuda -31-13 Homeoie dearing Alo oxanth bank ale. Posterek Debit Dati a-31-13 hame afesdeoring tile. ranch bank Ale

CThe ad uting entics 10puived in-tke byonch bank xetords (o ALouat Title xplanalian. Cedit Date Past Debit a-31-13 Ceakal bank Ale banch oltie clearingale 2-31-13 ceatial bank ale ao00 anch afee dearing alo 4a1,000 Fo th home oie attount ali the adjusted dipoit shoud be addidto in tonsit amount fov the Cent the balanee per bank befac adjustment in the Dee 31,8013 bank Yelonciiation. fon the banch bank account all the adjusted depost in tansit amourt -for -the cueatea should be added to tke balance por bank bfore adjustment in the Dec 31,a013 bank reconeikiation