$Asof$ year$-$end $(\frac{12}{31})$ for each $of$ the checks above:

$Is$ cash $on$ the balance sheet overstated, understated, $or$ properly stated?

$If$ overstated $or$ understated, would the misstatement $be$ caught when reconciling the bank cash balance for each account $to$ the book cash balance?

Here are a few tips $to$ help you complete $it$ correctly:

$To$ answer the first question $(is$ the balance sheet cash overstated, understated, $or$ properly stated$),$ focus first $on$ the book columns and ignore the bank columns. $If$ the book disbursement and the book deposit both occur $in$ the same fiscal period $(i.e.,$ the same month$),$ then $itis$ properly stated. This $is$ true even $if$ both happen $in$ January despite the fact that they should have been recorded $in$ December.

$If$ they happen $in$ two different periods, look $at$ which side $of$ the transaction $(the$ disbursement $or$ the deposit$)$ was recorded $in$ January. This $is$ the account that would $be$ misstated. Normally $if$ they are kiting, $it$ would $be$ the disbursement, but $in$ this homework assignment, $itis$ sometimes the deposit. $Ifitis$ the disbursement $(i.e.,$ the credit $to$ cash$)$ that $is$ recorded $in$ January, then the disbursement account $is$ overstated. $Ifitis$ the deposit, the deposit account $is$ understated.

$Upto$ this point, you have ignored the "bank" column, but you will need $to$ consider $itto$ see $if$ the bank reconciliation will catch the misstatement. You now want $to$ focus $on$ the book and bank columns for the account that $is$ misstated $(as$ you determined $itin$ step $2).If$ both the book and bank recorded the transaction $in$ the same period $(January),$ then the bank reconciliation will NOT catch the misstatement because the reconciliation only identifies differences between the books and bank. $If$ the books and bank recorded the transaction $in$ different periods, then the reconciliation WILL catch the misstatement.