Which item is typically examined as part of bank activity in an audit?

• A. The docket books
• B. Monthly bank reconciliations for each bank account, including canceled checks and bank statements
• C. Office supply orders
• D. Advertising expenses

Answer: (B)

Bank activity in an audit is typically examined by reviewing monthly bank reconciliations for each bank account, along with supporting documents like the bank statements and canceled checks. These reconciliations show how the organization’s records line up with the banks’ records, revealing timing differences (like deposits in transit or outstanding checks) and any discrepancies, errors, or potential irregularities in cash disbursements. This evidence helps confirm the cash balance and tests the effectiveness of internal controls over cash, ensuring transactions are recorded accurately and authorized. The other items aren’t direct evidence of bank activity: docket books relate to court cases, while office supply orders and advertising expenses are operating costs, not cash-and-bank evidence.