Question

Accounting Systems and Information Assurance - ACCT20072 Page 8 of 8 Question 6 – Transaction cycle 5 marks Alpha Ltd has a reconciliation problem. The amount of cash receipted and banked by the cashier does not seem to agree with the amount allocated against open invoices in the accounts receivable customer records. Alpha Ltd seems to have good controls — it separates the receipting and recording of cash, and it regularly conducts a reconciliation. Required: What documentation should you examine within the revenue cycle in order to investigate this problem?

Answer 1

A bank reconciliation statement is a process that explains the difference on a specified date between the bank balance shown in an organization's bank statement, as supplied by the bank and the corresponding amount shown in the organization's own accounting records.A reconciliation compares the bank statement and our company’s records and reconciles or balances to two account balances.

Documents required while investigating the difference in cash receipted and banked by the cashier are as follow:

1 Bank Statement

A bank statement is a record of your bank account transactions, typically for one month, prepared by the bank. It records all the transactions happened in a particular time period from account of the company.

2 Company’s Records

The company’s records (or books) refers to the general ledger posting and can be in the form of cash disbursement journal, cash receipt journal, cash general ledger postings or lists of cash transactions where all transactions are recorded

after these documents we examine them and find the reason for difference in the books