Question

Jordan Quinn manages the local homeless shelter. He fears that a trusted employee has been stealing from the shelter. This employee receives cash from supporters and also prepares the monthly bank reconciliation. To check on the employee, Quinn prepares his own bank reconciliation, as follows: (Click the icon to view the bank reconciliation.) Does it appear that the employee stole from the shelter? If so, how much? Explain your answer. Which side of the bank reconciliation shows the shelter's true cash balance? It appears the employee . The adjusted balance is the company's true cash balance, and the more cash on hand. Therefore, the books must be Bank reconciliation report Homeless Shelter Bank Reconciliation August 31, 2017 Books 3,300 Balance, August 31 S S 2,820 Bank Balance, August 31 Add: Deposits in transit Add: 400 Bank collections 800 10 Interest revenue | Less: Outstanding cheques Less: (1.100) Service charge 2,600 Adjusted book balance (30) 3,600 $ Adjusted bank balance $ Print Print Done Done]

Answer 1

It appears the employee stole $1,000. The adjusted bank balance is the company’s true cash balance, and the company’s book show more cash on hand. Therefore, the books must be incorrect.

Correct adjusted cash balance = Correct unadjusted cash balance + Bank collections + Interest revenue - Service charge
$2,600 = Correct unadjusted cash balance + $800 + $10 - $30
Correct unadjusted cash balance = $1,820

Correct unadjusted cash balance less than the Incorrect unadjusted cash balance, which means that the books are incorrect.