Reference no: EM131751232

A small hotel living outside the accountant to prepare the income statement after the end of each month. In the past three months shows that the amount of provision for bad debts has increased significantly in any previous month. The owner asks the accountant to verify the authenticity of all accounts receivable as bad debts over the past three months. Accounting found that the actual payment of a large number of accounts, and the contact person has canceled the check with the hotel stamps to prove this point. About three months before the new hotel bookkeeper was hired to carry all the records of the reservation, also served as cashier to receive and store cash received from the frontier cashier and handle, and deposited in the payment account receivable by mail. As the outside accountant of the hotel, explain to the owner what you think has happened and suggest how to solve the problem, the same situation will not happen again.