F COMPANY, organized on March 1, 2021, has a very poor internal control system. The company's cashier is also its accountant. After 9 months of operations, the company's manager suspects that the cashier-accountant has been misappropriating company collections. You have been engaged to audit the company's accounts to determine the extent of fraud, if any.
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Cash Shortage
F COMPANY, organized on March 1, 2021, has a very poor internal
company's cashier is also its accountant. After 9 months of operations, the company's manager
suspects that the cashier-accountant has been misappropriating company collections. You have
been engaged to audit the company's accounts to determine the extent of fraud, if any.
You started the audit on November 15. On that date, the cash on hand per your surprise count
was P5,140. Also on that date, the bank confirmed that the balance of the company's current
account was P26,328. Your examination of the records reveals that a check for P1,852 was
outstanding on November 15. The company's markup is 40% of sales.
Further examination of the company's records reveals the following balances at November 15,
2021:
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