Having a craaazy hard time with this SIM and it seems so simple.. I guess I am confused if they are asking if book balance is over/under stated, or if bank balance is over/understated?
Gemco has made a series of transfers between bank accounts near year-end, some through inter-bank wired transfers and some through checks. You have audited the wired transfers and agree that they have been properly stated and now have the following schedule of transfers between cash accounts made using checks. You may assume that dates per bank are correct, and that dates per books are the dates the transactions were recorded in the books.
Bank accounts Date disbursed per: Date deposited per:
Check number From To Amount Books Bank Books Bank
4040 1st Nat. Suburban $112,000 12/31 1/5 1/3 1/3
3270 Valley Midburg 62,500 12/31 1/3 12/31 12/31
4041 1st Nat. Capital 121,000 1/2 1/4 12/31 1/3
3271 Valley Suburban 16,500 1/3 1/5 1/3 12/30
0700 Midburg Suburban 15,800 12/30 1/5 12/30 1/3
Analyze each of the above transfers and determine whether you believe each causes total cash to most likely be correct, overstated, or understated as of year-end.
As a result of the transfer, total cash at
December 31 appears to be-
Answer
Question # Check number Total cash is most likely
1. 4040 Understated
2. 3270 Correct
3. 4041 Overstated
4. 3271 Overstated
5. 0070 Correct
for #4 I said correct because no entries are made in the books until after year end, and its just a transfer from one bank to the other, so I'd think if no entries, then book balance is correct.. but they say it's incorrect and that it's overstated because it shows up as a deposit in the bank before year end.. so that makes me think they are asking for bank balance..
but they say #2 is correct even though the disbursement wasn't taken out until after year end, but the deposit in the other bank went through before year end, so I said overstated.. ugh.. really hope I can figure this out or at least not see this on my test lol
FAR - 89 (8/19/14) Wiley TB, Wiley Book, Books from School, Ninja Audio/Notes
AUD - 92 (10/14/14) Wiley TB, Wiley Book, Ninja Audio
BEC - 82 (5/8/15) Mostly Ninja MCQ, sprinkles of Becker lectures and Ninja Audio
REG - (8/14/15)
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