Question

Cash receipts should be deposited on the day of receipt or the following business day. What is the most appropriate audit procedure to determine that cash is promptly deposited?
A. Review cash register tapes prepared for each sale.
B. Review the functions of cash handling and maintaining accounting records for proper segregation of duties.
C. Compare the daily cash receipts totals with the bank deposits.
D. Review the functions of cash receiving and disbursing for proper segregation of duties.

Answer 1

Answer:

The correct answer to the following question is option C) compare the daily cash receipts totals with the bank deposits.

Explanation:

When cash receipts are received by a company, it is often deposited in bank on the bank the same day they are received or they should be deposited the following business day. If a auditor or a manger or owner wants to make sure that the cash is promptly deposited everyday, then one way in which he or she can make sure that this is happening promptly is by comparing the daily cash deposits with the bank deposits or bank statements, through this procedures a person comparing them would come to know of any discrepancy in cash deposit, if it exist.