Using bank reconciliation to determine cash receipts stolen Alaska Impressions Co. records all cash receipts on the basis of its cash register tapes. Alaska Impressions discovered during October 20Y3 that one of its sales clerks had stolen an undetermined amount of cash receipts by taking the daily deposits to the bank. The following data have been gathered for October: Cash in bank according to the general ledger Cash according to the October 31, 20Y3, bank statement $11,680 13,275 3,670 40 Outstanding checks as of October 31, 20Y3 Bank service charge for October Note receivable, including interest collected by bank in October 2,100 No deposits were in transit on October 31. a. Determine the amount of cash receipts stolen by the sales clerk. 3,710 X b. What accounting controls would have prevented or detected this theft? Separation of duties. Feedback Check My Work a. Prepare a bank reconciliation. Because the cash has been stolen, the adjusted balances in the bank and company sections of the reconciliation will not be equal. The difference is the stolen cash. b. Control procedures provide reasonable assurance that business goals will be achieved, including the prevention of fraud. Control procedures, which constitute one of the most important elements of internal control, include the following: 1. Competent personnel, rotating duties, and mandatory vacations 2. Separating responsibilities for related operations 3. Separating operations, custody of assets, and accounting 4. Proofs and security measures