ACC – Blue River Faith Company
Date Disbursement Amount Date Deposit Date cleared Date Cleared
Per Branch Home Office home office per branch statement
12-29-2011 $80,000 12-31-2011 12-31-2011 01-07-2012
01-02-2012 $41,000 12-31-2011 12-31-2011 01-05-2012
01-05-2012 $82,000 01-03-2012 01-07-2012 01-12-2012
12-31-2011 $54,000 01-02-2012 01-03-2012 01-08-2012
01-03-2012 $11,000 01-03-2012 12-31-2011 01-05-2012
12-27-2011 $32,000 12-31-2011 12-31-2011 01-03-2012
1) Briefly explain the audit objective in obtaining the bank transfer data above which you will use to prepare the Bank Transfer Schedule that reflects the correct information.
2) Identify the audit procedures that would be used to test the correctness of the clientâ€™s bank transfers. Keep in mind the purpose (cutoff) of the schedule or tests.
3) Identify any adjusting journal entries that would be needed on either the home office or branch office accounting records as a result of the preceding transactions.
4) Indicate how each of the above transactions would be reflected on the December 31, 2011 bank statements of both the home office and the branch office.
5) Indicate which transactions require no adjustment. Indicate which transactions indicate kiting. Indicate which transactions represent errors in cash classification but not in dollar amount for the consolidated/combined cash for the overall company as a whole.