Reference no: EM132946872

Question - A company has two bank accounts and booked a transfer between the accounts, if bank account #1 sent the money on December 30th, 20XX, but the money was not recorded as a journal entry as of January 3rd, 20X1, and not taken out of this bank account until January 3rd, 20X1. The 2nd bank account showed this money was recorded on the books and received by its bank account on December 31, 20XX. What is the risk to the company's cash balance in the situation above? (Think about overstatement vs understatement risk for the cash bank account, explain why by talking about the impact of this transaction to bank account #1 and #2 described above.)