Record the reconciling items noted under the book side

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Reference no: EM132609425

Bank reconciliations reconciles the items reported on the bank statement and the accounting GL. It also helps identify discrepancies in records, acting as an internal control for cash.

TJ Solutions provides IT support services to retail businesses in the lower mainland. Recently, Harold, the owner, has suspected his employee and cashier, George, of stealing. George handles all incoming cash and makes bank deposits. He also writes cheques and reconciles the monthly bank statement. Due to his other work, Harold has not reviewed the bank recs regularly, and has placed large amounts of trust in George.

Details of the business's cash position at July 31, 2020 follows:

a. The cash account in the GL shows a balance of $11,900

b. The July 31 bank statement shows a balance of $12,250. The bank statement lists a $500 credit for a bank collection (customer payment), a $15 debit for the service charge, and an $90 debit for an NSF cheque. These items have not been recorded in the books.

c. There are no bank or book errors.

Question 1: Complete the bank rec for July 31, 2020. Determine whether George has stolen cash from the business. How much?

Question 2: Record the reconciling items noted under the book side.

Question 3: Why did theft occur? What should Harold do? Evaluate the internal controls and make recommendations to Harold to prevent theft in the future.

Reference no: EM132609425


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