Question 1

Bank interest earned on a checking account would be shown on a bank reconciliation as:

Accepted Answer

A) added to the balance per bank statement. 
B) deducted from the balance per bank statement. 
C) added to the balance per books. 
D) deducted from the balance per books. 
A) added to the balance per bank statement. 
B) deducted from the balance per bank statement. 
C) added to the balance per books. 
D) deducted from the balance per books.

Question 2

The entry to replenish the petty cash fund included a debit to Equipment instead of Supplies for the purchase of supplies.This would cause:

Accepted Answer

A) petty cash to be overstated. 
B) petty cash to be understated. 
C) equipment is understated. 
D) supplies to be understated. 
A) petty cash to be overstated. 
B) petty cash to be understated. 
C) equipment is understated. 
D) supplies to be understated.

Question 3

One internal control safeguard is to assign all the duties of receiving,depositing,and recording cash to separate employees.

Accepted Answer

A) True 
 B)False

Question 4

A bank service charge would be included on the bank reconciliation as a(n):

Accepted Answer

A) addition to the balance per books. 
B) subtraction from the balance per books. 
C) addition to the balance per bank. 
D) subtraction from the balance per bank. 
A) addition to the balance per books. 
B) subtraction from the balance per books. 
C) addition to the balance per bank. 
D) subtraction from the balance per bank.

Question 5

For each of the following,identify in Column 1 the category to which the account belongs,in Column 2 the normal balance for the account,in Column 3 the financial statement on which the account balance is reported,and in Column 4 the nature of the account (permanent/temporary).
Example:
  
-

Accepted Answer

The answer of For each of the following,identify in Column...

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

The entry to replenish the petty cash fund debited Insurance Expense for postage.This would cause:

Accepted Answer

A) Petty Cash to be overstated. 
B) Petty Cash to be understated. 
C) Postage Expense to be overstated. 
D) Insurance Expense to be overstated. 
A) Petty Cash to be overstated. 
B) Petty Cash to be understated. 
C) Postage Expense to be overstated. 
D) Insurance Expense to be overstated.

Question 8

________ Filled up the company's truck with gas and used cash

Accepted Answer

The answer of ________ Filled up the company's truck with...

Question 9

The May bank statement for Consulting Services shows a balance of $7300,but the balance per books shows a cash balance of $8,980.Other information includes:
1)A check for $200 to pay the electric bill was recorded on the books as $20.
2)Included on the bank statement was a note collected by the bank for $400 plus interest of $30.
3)Checks outstanding totaled $260.
4)Bank service charges were $50.
5)Deposits in transit were $2,140.
Which item should be added to the company's book balance during the bank reconciliation?

Accepted Answer

A) Deposit in transit 
B) Outstanding check 
C) Bank service charge 
D) Note collected by the bank 
A) Deposit in transit 
B) Outstanding check 
C) Bank service charge 
D) Note collected by the bank

Question 10

When adjustments are made to the bank balance when completing a bank reconciliation,a journal entry is needed to bring the bank balance up to date.

Accepted Answer

A) True 
 B)False

Question 11

A company would use a change fund if:

Accepted Answer

A) there are cash transactions daily. 
B) they want to pay the postage expense without writing a check. 
C) the owner wants to make personal withdrawals easily. 
D) there are supplies purchased for cash. 
A) there are cash transactions daily. 
B) they want to pay the postage expense without writing a check. 
C) the owner wants to make personal withdrawals easily. 
D) there are supplies purchased for cash.

Question 12

Determine the cash shortage given the following:
The balance per the Petty Cash account $100
The count of coin and currency amounts to $52
There are receipts: for gas of $9,for office supplies of $18,for first aid supplies $14
$ ________

Accepted Answer

$7 short [

Question 13

Prepare a bank reconciliation from the following information:

Accepted Answer

The answer of Prepare a bank reconciliation from the following...

Question 14

Using correct cash handling procedures,deposits should be made by the end of the week.

Accepted Answer

A) True 
 B)False

Question 15

A $100 petty cash fund has cash of $20 and valid receipts for $40.The entry to replenish the fund would include a:

Accepted Answer

A) credit to Cash for $80. 
B) credit to Cash for $40. 
C) credit to Petty Cash for $30. 
D) debit to Petty Cash for $40. 
A) credit to Cash for $80. 
B) credit to Cash for $40. 
C) credit to Petty Cash for $30. 
D) debit to Petty Cash for $40.

Question 16

The entry to establish the petty cash fund debited Misc.Expense.This would cause:

Accepted Answer

A) revenues to be overstated. 
B) revenues to be understated. 
C) expenses to be overstated. 
D) expenses to be understated. 
A) revenues to be overstated. 
B) revenues to be understated. 
C) expenses to be overstated. 
D) expenses to be understated.

Question 17

The bank would issue a credit memorandum to Mary's Life Management when the bank:

Accepted Answer

A) received the deposits in transit. 
B) collects a note receivable from a customer. 
C) discovered a check that was deposited was returned for nonsufficient funds. 
D) None of these answers is correct. 
A) received the deposits in transit. 
B) collects a note receivable from a customer. 
C) discovered a check that was deposited was returned for nonsufficient funds. 
D) None of these answers is correct.

Question 18

The first two numbers of the ABA code listed on the check represent:

Accepted Answer

A) the Federal Reserve District. 
B) the code indicating business or personal account. 
C) the routing number. 
D) the account number. 
A) the Federal Reserve District. 
B) the code indicating business or personal account. 
C) the routing number. 
D) the account number.

Question 19

Determine the unadjusted balance per bank statement given the following:
The balance per general ledger is $200.
There is a credit memo for a note collected,$450.
There is a debit memo for interest expense,$50.
There is a debit memo for a customer's NSF check $425.
Outstanding checks amount to $2,000.
This month's service charge amounts to $50.
Deposits in transit amount to $1,500.
$ ________

Accepted Answer

$125 [($20

Question 20

Petty Cash is an asset shown on the income statement.

Accepted Answer

A) True 
 B)False

Exam 6: Banking Procedure and Control of Cash

Bank interest earned on a checking account would be shown on a bank reconciliation as:

The entry to replenish the petty cash fund included a debit to Equipment instead of Supplies for the purchase of supplies.This would cause:

One internal control safeguard is to assign all the duties of receiving,depositing,and recording cash to separate employees.

A bank service charge would be included on the bank reconciliation as a(n):

For each of the following,identify in Column 1 the category to which the account belongs,in Column 2 the normal balance for the account,in Column 3 the financial statement on which the account balance is reported,and in Column 4 the nature of the account (permanent/temporary). Example: -

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

The entry to replenish the petty cash fund debited Insurance Expense for postage.This would cause:

________ Filled up the company's truck with gas and used cash

When adjustments are made to the bank balance when completing a bank reconciliation,a journal entry is needed to bring the bank balance up to date.

A company would use a change fund if:

Determine the cash shortage given the following: The balance per the Petty Cash account $100 The count of coin and currency amounts to $52 There are receipts: for gas of $9,for office supplies of $18,for first aid supplies $14 $ ________

Prepare a bank reconciliation from the following information:

Using correct cash handling procedures,deposits should be made by the end of the week.

A $100 petty cash fund has cash of $20 and valid receipts for $40.The entry to replenish the fund would include a:

The entry to establish the petty cash fund debited Misc.Expense.This would cause:

The bank would issue a credit memorandum to Mary's Life Management when the bank:

The first two numbers of the ABA code listed on the check represent:

Petty Cash is an asset shown on the income statement.

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Calculating Pay and Payroll Taxes: the Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes:

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property,plant,equipment,and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values,dividends,treasury Stocks,

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

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