The Correct question reads;
Which of the following statements about bank reconciliations is correct?
a. Should not be prepared by an employee who handles cash transactions
b. Is part of a sound internal control system
c. Is a formal financial statement
d. Both (a) and (b) are correct
Answer:
a. Should not be prepared by an employee who handles cash transactions
Explanation:
It is only a bank that prepares a bank reconciliation statement. So, it is correct to say that a bank reconciliation statement should not be prepared by an employee who handles cash transactions.