DECISION CASE STUDY

Environmental Concerns, Inc., has poor internal control. Recently, Oscar Benz, the manager, has suspected the bookkeeper of stealing.

Details of the business's cash position at September30follow.

a.The Cash account shows a balance of $10,402. This amount includes a September 30 deposit of $3,794 that does not appear on the September 30 bank statement.

b.The September 30 bank statement shows a balance of $8,224. The bank statement lists a $200 bank collection, an $8 service charge, and a $36 NSF check. The accountant has not recorded any of these items.

c.At September 30, the following checks are outstanding:

\fBalance per books, September 30 $10,402 Add: Outstanding checks .......... 1,460 Bank collection... 200 12,062 Less: Deposits in transit. $3,794 Service charge .... NSF check ... 36 (3,838 Balance per bank, September 30. $ 8.224