Document

$($For each Document Callout, choose the correct Determination from the table below.$)$

To: Audit Senior

From: Audit Assistant

Re: Keystone Computers & Networks Incorporated General Account Cash

Date: January $11,$ year $6$

I have a number of points related to the auditing procedures I applied to Keystone's cash accounts as follows:

Cash Lead Schedule $($Exhibit $1)$: The company's petty cash $($account $101)$ is stated at $$50.$ But the petty cash custodian acknowledges that there was only $$41$ in the account as of year$-$end because a $$9\mathrm{.}00$ expenditure for supplies had been made. This overstates cash by $$9\mathrm{.}00,$ although pass adjustment due to immateriality. $($Callout #$1)$

Bank Reconciliation $($Exhibit $2)$: The account receivable collected by the bank was paid by a client directly to the bank on December $29,$ year $5.$ Keystone recorded the entry for the proper amount on January $2,$ year $6.$ No adjusting entry is needed as of $12/31/$year $5.($Callout #$2)$

Standard Bank Confirmation $($Exhibit $3)$: The bank representative added a comment to the confirmation. The commept is a "boilerplate" disclaimer of liability that definitely does not affect the reliability of the information we obtained. $($Callowi #$3)$

Deposit in Transit $($Exhibit $4)$: The deposit in transit seems properly handled on the bank reconciliation $($Exhibit $2)$ with a debit to cash. $($Callout #$4)$

Outstanding Checks $($Exhibit $5)$ and Bank Transfer Schedule $($Exhibit $6)$: Check $2034$ from the bank transfer schedule was omitted from the list of outstanding checks. This is because it was not written until $1/1/$year $6.($Callout #$5)$

Outstanding Checks $($Exhibit $5)$: The long$-$outstanding check for $$200$ will probably never be cashed as the company has attempted to communicate with the payee and failed. Because the state does not require submission of such funds, we should suggest to the client that the $$200$ check be deleted from the outstanding check list; no adjusting journal entry seems necessary. $($Callout #$6)$

Outstanding Checks $($Exhibit $5)$: Keystone's first bank statement in year $6$ included check $2027$ dated on $\frac{12}{30}$ for $$1,500$ to Jenco Corp. I found the check to be properly recorded in the cash disbursements journal as of $\frac{12}{30}\frac{?}{?}$ year $5.$ No further audit response is necessary related to check $2027.($Callout #$7)$

Bank Transfer Schedule $($Exhibit $6)$: Check $2032$ appears to result in the cash being recorded in both accounts per books as of year$-$end and thus overstates total cash by $$1,500$ at year$-$end. $($Callout #$8)$