Is bank reconciliation part of the internal control system?

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Answered 9 months ago

Bank reconciliation is done to find the discrepancies between the cash balance per book and the cash balance per bank statement. This is to ensure that the balances will match accordingly.

Through bank reconciliation, companies can easily determine the composition of discrepancies issuing a clearer view of the transactions that happened that are not in the book but in the bank statement or vice versa. Therefore, this is part of the internal control system to detect any inconsistency in records that may eventually discover errors and even fraud.

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accounting

Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go-karts: deluxe and basic.

Activity	Expected Costs	Expected Activity
Handling materials	$625,000	100,000 parts
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Processing purchase orders	105,000	700 orders
Paying suppliers	175,000	500 invoices
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Designing packaging	75,000	2 models

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Compute the activity rate for each activity, assuming the company uses activity-based costing.

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accounting

Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go-karts: deluxe and basic.

Activity	Expected Costs	Expected Activity
Handling materials	$625,000	100,000 parts
Inspecting product	900,000	1,500 batches
Processing purchase orders	105,000	700 orders
Paying suppliers	175,000	500 invoices
Insuring the factor	300,000	40,000 square feet
Designing packaging	75,000	2 models

Required

Compute the activity rate for each activity, assuming the company uses activity-based costing.

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Is bank reconciliation part of the internal control system?

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