Alaska Impressions Co. records all cash receipts on the basis of its cash register tapes. Alaska Impressions Co. discovered during October that one of its salesclerks had stolen an undetermined amount of cash receipts while taking the daily deposits to the bank. The following data have been gathered for October: Cash in bank according to the general ledger $7,030
Cash according to the October 31 bank statement 16,240
Outstanding checks as of October 31 4,640
Bank service charge for October 20
Note receivable, including interest collected by bank in October 7,520

Requied:
a. Determine the amount of cash receipts stolen by the sales clerk.
b. What accounting controls would have prevented or detected this theft?

a. Determine the amount of cash receipts stolen by the sales clerk.

$2,930

b. What accounting controls would have prevented or detected this theft?

It is simple, one single person cannot be in charge of collecting cash and making the deposits. At least 2 people must be involved in the process, that way, there will always be someone controlling what the other person does.

Explanation:

Reconciled bank statement:

Bank statement $16,240

- Outstanding checks $4,640

Reconciled bank statement $11,600

Cash account reconciliation:

Cash account balance $7,030

+ Note collected by bank $7,520

- Bank fees $20

Reconciled cash account $14,530

Amount stolen by sales clerk = $14,530 - $11,600 = $2,930

answerblank(1) starts; blank(2); // cash cows;

the answers are

a, b, c, & e.