Question

The audit objective of determining that cash in bank, as stated on the reconciliation, foots correctly and agrees with the general ledger can be tested by which of the following procedures?

a. Performing tests for kiting.
b. Receiving and testing a cutoff bank statement.
c. Footing the outstanding checks list and the list of deposits in transit.
d. Examining the minutes of the board of directors for restrictions on the use of cash.

Answer 1

The audit objective of determining that cash in bank, as stated on the reconciliation, foots correctly and agrees with the general ledger can be tested by footing the outstanding checks list and the list of deposits in transit.

Step-by-step explanation:

The audit objective of determining that cash in bank, as stated on the reconciliation, foots correctly and agrees with the general ledger can be tested by footing the outstanding checks list and the list of deposits in transit. This procedure involves adding up the amounts of outstanding checks and deposits in transit and comparing them to the amounts recorded in the general ledger. If the totals match, it indicates that cash in the bank is accurately stated in the reconciliation.