Which one of the following errors would be LEAST likely to be discovered during the tests of the bank reconciliation?
A) The existence of payments on notes payable that were debited directly to the bank balance by the bank but were not entered in the client's records
B) Cash received by the client subsequent to the balance sheet date that was recorded as cash receipts in the current year
C) Failure to include a cheque that has not cleared the bank on the unpresented cheque list, even though it has been recorded in the cash payments journal
D) Payment to an employee for more hours than he or she worked

Question

Quizplus · Accepted Answer

The bank reconciliation process primarily focuses on reconciling the client's cash balance with that of the bank. It may not detect errors such as payment to an employee for more hours than he or she worked, which is an error in payroll. This error would likely be discovered during the audit of payroll rather than during the bank reconciliation process. Options A, B, and C are errors that typically arise during the bank reconciliation process and would be likely to be discovered during the tests.

Which One of the Following Errors Would Be LEAST Likely