Exam 8: Banking Procedures and Control of Cash

Information to calculate the adjusted cash balance for Fran's Food Services is as follows: Cash balance per general ledger $2,000 Customer's cheque returned--NSF 75 Bank service charges 40 Deposits in transit 500 Outstanding cheques 700 Customer's note collected by bank 645

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(Multiple Choice)

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Question 1

Correct Answer:

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When adjustments are made to the General Ledger balance in preparing a bank reconciliation, a journal entry is needed to bring the ledger up to date.

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(True/False)

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Question 2

Correct Answer:

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True

List and describe some of the electronic conveniences that we are now provided when doing our banking.

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Question 3

Correct Answer:

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ATM - Automated Teller Machines enable the user to withdraw money at any time up to a specified amount.
Online banking - allows us to pay bills, reconcile our account, transfer funds, at the touch of a finger. Available any time day or night.
SWIFT codes - used for rapid and reliable transfer of money worldwide.
Credit Card Integration - More businesses are issuing their employees with company credit cards in order to simplify record-keeping and speed up reimbursement.
Direct Payroll Deposit - Rather than issue cheques to their employees, companies may transfer funds directly into employees' bank accounts.

A payment for $32 is incorrectly recorded on the chequebook stub as $23. The $9 error should be shown on the bank reconciliation as

(Multiple Choice)

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Question 4

A signature card is kept in the bank files so that possible forgeries could be spotted.

(True/False)

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Question 5

When a bank credits your account, it is increasing the balance.

(True/False)

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Question 6

Marcella Industries received a credit memorandum from the bank. During the bank reconciliation they should

(Multiple Choice)

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Question 7

Deposits that have been added to the bank balance but not the General Ledger balance are called deposits in transit.

(True/False)

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Question 8

Construct the bank reconciliation for Zone Training, as of October 31, from the following information: Ending General Ledger balance $840 Ending bank statement balance 640 Deposits in transit 440 Outstanding cheques 280 Bank service charge (debit memo) 40

(Essay)

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Question 9

Prepare journal entries for the following petty cash fund transactions: Nov. 1 Established a $50 petty cash fund. 15 Increased the petty cash fund to have a new balance of $100. 30 Replenished the petty cash fund. Currency and coins remaining were $24. Approved paid vouchers were: $10 donation expense; $16 postage expense; $30 office supplies expense; and $20 misc. expense.

(Essay)

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Question 10

From the following information, prepare the bank reconciliation for Erin's Hair Studio for June 30, 2019. Ending General Ledger balance $190 Ending bank statement balance 130 Deposits in transit 90 Outstanding cheques 40 Service Charge 10

(Essay)

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Question 11

The August bank statement for Jenn's Nursing Service shows a balance of $8,900, but the balance per the ledger account shows a cash balance of $8,310. Other information includes 1. A cheque for $10 was recorded on the books as $100. 2) Included on the bank statement was a note collected by the bank for $600 plus $40 interest. 3) Cheques outstanding totalled $480. 4) Bank service charges were $20. 5) Deposits in transit were $600. The adjusted cash balance at the end of August should be

(Multiple Choice)

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Question 12

When reconciling the ending bank balance per the company records to the correct adjusted bank balance, outstanding cheques are

(Multiple Choice)

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Question 13

From the bank reconciliation no entry was recorded for deposits in transit. This would cause

(Multiple Choice)

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Question 14

Deposits that have been added to the bank balance but not the General Ledger balance are called deposits in transit.

(True/False)

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Question 15

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts. The facts are: total cash register tapes $300; total coins and currency $304. The summary journal entry to record the day's transactions would include a

(Multiple Choice)

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Question 16

Petty Cash could be used to purchase a box of paper clips if required.

(True/False)

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Question 17

Petty cash disbursements for expenses should be reported daily in the

(Multiple Choice)

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Question 18

On a bank reconciliation, outstanding cheques are deducted from the balance per books.

(True/False)

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Question 19

Construct a bank reconciliation for Bark Zoo as of April 30, 2019, from the following information: Ending general ledger balance $5,500 Ending bank statement balance $5,300 Deposit in transit $2,000 Outstanding cheques $1,030, $79, $500 and $100 Bank collected a note from Zebra Co. $ 300 Recorded cheque as $89 instead of $98 on cheque stub. Correct amount on cheque. Wolf Co. cheque for $200 came back because of insufficient funds

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Question 20

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Information to calculate the adjusted cash balance for Fran's Food Services is as follows: Cash balance per general ledger $2,000 Customer's cheque returned--NSF 75 Bank service charges 40 Deposits in transit 500 Outstanding cheques 700 Customer's note collected by bank 645

When adjustments are made to the General Ledger balance in preparing a bank reconciliation, a journal entry is needed to bring the ledger up to date.

List and describe some of the electronic conveniences that we are now provided when doing our banking.

A payment for $32 is incorrectly recorded on the chequebook stub as $23. The $9 error should be shown on the bank reconciliation as

A signature card is kept in the bank files so that possible forgeries could be spotted.

When a bank credits your account, it is increasing the balance.

Marcella Industries received a credit memorandum from the bank. During the bank reconciliation they should

Deposits that have been added to the bank balance but not the General Ledger balance are called deposits in transit.

Construct the bank reconciliation for Zone Training, as of October 31, from the following information: Ending General Ledger balance $840 Ending bank statement balance 640 Deposits in transit 440 Outstanding cheques 280 Bank service charge (debit memo) 40

From the following information, prepare the bank reconciliation for Erin's Hair Studio for June 30, 2019. Ending General Ledger balance $190 Ending bank statement balance 130 Deposits in transit 90 Outstanding cheques 40 Service Charge 10

When reconciling the ending bank balance per the company records to the correct adjusted bank balance, outstanding cheques are

From the bank reconciliation no entry was recorded for deposits in transit. This would cause

Deposits that have been added to the bank balance but not the General Ledger balance are called deposits in transit.

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts. The facts are: total cash register tapes $300; total coins and currency $304. The summary journal entry to record the day's transactions would include a

Petty Cash could be used to purchase a box of paper clips if required.

Petty cash disbursements for expenses should be reported daily in the

On a bank reconciliation, outstanding cheques are deducted from the balance per books.

Accounting Concepts and Procedures: an Introduction

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle: Journalizing, Posting, and the Trial Balance

The Accounting Cycle Continued: Preparing Worksheets and Financial Statements

The Accounting Cycle Completed: Closing and Post-Closing Trial Balance

Special Journals and Subsidiary Ledgers: the Basics: Sales and Cash

Special Journals and Subsidiary Ledgers: the Basics: Purchases and Cash Payments Journals

Payroll Procedures: the Employees Perspective

The Employers Tax Responsibilities: Principles and Procedures

Special Journals With Taxes

Preparing a Worksheet for a Merchandising Company

Completion of the Accounting Cycle for a Merchandising Company

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