Question 1

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled checks.

Accepted Answer

A) True 
 B)False  False

Question 2

Control over cash disbursements is improved if major expenditures are paid by check.

Accepted Answer

A) True 
 B)False  True

Question 3

The cash account shows a balance of $42000 before reconciliation. The bank statement does not include a deposit of $9200 made on the last day of the month. The bank statement shows a collection by the bank of $4960 and a customer's check for $1100 was returned because it was NSF. A customer's check for $1380 was recorded on the books as $1830 and a check written for $318 was recorded as $381. The correct balance in the cash account was

Accepted Answer

A)  $45347. 
B)  $45473. 
C)  $46573. 
D)  $54673. 
A)  $45347. 
B)  $45473. 
C)  $46573. 
D)  $54673. B

Question 4

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

Accepted Answer

A)  Accounts Receivable Cash 
B)  Cash Accounts Receivable 
C)  Miscellaneous Expense Accounts Receivable 
D)  No adjusting entry is necessary. 
A)  Accounts Receivable Cash 
B)  Cash Accounts Receivable 
C)  Miscellaneous Expense Accounts Receivable 
D)  No adjusting entry is necessary.

Question 5

Identify whether each of the following items would be (a) added to the book balance (b) deducted from the book balance in a bank reconciliation (c) added to the bank balance or (d) deducted from the bank balance.
1. Deposits in transit
2. Bank service charge
3. Collection of note and interest by bank on company's behalf
4. NSF check
5. Outstanding checks

Accepted Answer

1. c
2. b

Question 6

In preparing its bank reconciliation for the month of April 2016 Leno Inc. has available the following information. $\begin{array}{lr}
\text { Balance per bank statement, } 4 / 30 / 16 & \$ 76,800 \
\text { NSF check returned with } 4 / 30 / 16 \text { bank statement } & 940 \
\text { Deposits in transit, } 4 / 30 / 16 & 9,000 \
\text { Outstanding checks, } 4 / 30 / 16 & 9,300 \
\text { Bank service charges for April } & 60
\end{array}$ What should be the adjusted cash balance at April 30 2016?

Accepted Answer

A)  $75100. 
B)  $75800. 
C)  $75920. 
D)  $76500. 
A)  $75100. 
B)  $75800. 
C)  $75920. 
D)  $76500.

Question 7

Under a voucher system a prenumbered voucher is prepared for every

Accepted Answer

A)  cash receipt regardless of source. 
B)  transaction entered into by the business. 
C)  expenditure except those made from petty cash. 
D)  journal entry. 
A)  cash receipt regardless of source. 
B)  transaction entered into by the business. 
C)  expenditure except those made from petty cash. 
D)  journal entry.

Question 8

White Water Kayak Company's bank statement for the month of September showed a balance per bank of $6900. The company's Cash account in the general ledger had a balance of $5573 at September 30. Other information is as follows:
(1) Cash receipts for September 30 recorded on the company's books were $5850 but this amount does not appear on the bank statement.
(2) The bank statement shows a debit memorandum for $25 for check printing charges.
(3) Check No. 119 payable to Blacque Company was recorded in the cash payments journal and cleared the bank for $236. A review of the accounts payable subsidiary ledger shows a $27 credit balance in the account of Blacque Company and that the payment to them should have been for $263.
(4) The total amount of checks still outstanding at September 30 amounted to $4800.
(5) Check No. 148 was correctly written and paid by the bank for $408. The cash payment journal reflects an entry for Check No. 148 as a debit to Accounts Payable and a credit to Cash in Bank for $480.
(6) The bank returned an NSF check from a customer for $340.
(7) The bank included a credit memorandum for $2670 which represents collection of a customer's note by the bank for the company; principal amount of the note was $2600 and interest was $70. Interest has not been accrued.
Instructions
(a) Prepare a bank reconciliation for White Water Kayak Company at September 30.
(b) Prepare any adjusting entries necessary as a result of the bank reconciliation.

Accepted Answer

The answer of White Water Kayak Company's bank statement for...

Question 9

Proper control for over-the-counter cash receipts includes

Accepted Answer

A)  a cash register with totals visible to the customer. 
B)  using electronic cash registers with no tapes. 
C)  cash count sheets requiring only the supervisor's signature. 
D)  cash count sheets requiring only the cashier's signature. 
A)  a cash register with totals visible to the customer. 
B)  using electronic cash registers with no tapes. 
C)  cash count sheets requiring only the supervisor's signature. 
D)  cash count sheets requiring only the cashier's signature.

Question 10

Koffoed Inc. had the following bank reconciliation at March 31 2016: $\begin{array}{lr}
\text { Balance per bank statement, } 3 / 31 / 16 & \$ 37,200 \
\text { Add: Deposit in transit } & \underline{6,200} \
&{43,400}\
\text { Less: Outstanding checks } & 7,600 \
\text { Balance per books, } 3 / 31 / 16 & \$ 35,800 \
\text { lata per bank for the month of April 2016 follow: } & \
\text { Deposits } & \$ 47,600 \
\text { Disbursements } & 47,900
\end{array}$
 All reconciling items at March 31 2016 cleared the bank in April. Outstanding checks at April 30 2016 totaled $7000. There were no deposits in transit at April 30 2016. What is the cash balance per books at April 30 2016?

Accepted Answer

A)  $28500 
B)  $35500 
C)  $29800 
D)  $32800 
A)  $28500 
B)  $35500 
C)  $29800 
D)  $32800

Question 11

Ella Company wrote checks totaling $36140 during October and $37030 during November. $34280 of these checks cleared the bank in October and $34640 cleared the bank in November. What was the amount of outstanding checks on November 30?

Accepted Answer

A)  $2390 
B)  $1860 
C)  $4250 
D)  $890 
A)  $2390 
B)  $1860 
C)  $4250 
D)  $890

Question 12

The use of remittance advices for mail receipts is an example of

Accepted Answer

A)  documentation procedures. 
B)  other controls. 
C)  physical controls. 
D)  independent internal verification. 
A)  documentation procedures. 
B)  other controls. 
C)  physical controls. 
D)  independent internal verification.

Question 13

Having one person responsible for the related activities of ordering merchandise receiving goods and paying for them

Accepted Answer

A)  increases the potential for errors and fraud. 
B)  decreases the potential for errors and fraud. 
C)  is an example of good internal control. 
D)  is a good example of safeguarding the company's assets. 
A)  increases the potential for errors and fraud. 
B)  decreases the potential for errors and fraud. 
C)  is an example of good internal control. 
D)  is a good example of safeguarding the company's assets.

Question 14

The cash records of Jasmin Company show the following four situations.
1. The June 30 bank reconciliation indicated that deposits in transit total $2110. During July the general ledger account Cash shows deposits of $23620 but the bank statement indicates that only $23400 in deposits were received during the month.
2. The June 30 bank reconciliation also reported outstanding checks of $1250. During the month of July Jasmin Company books show that $25800 of checks were issued. The bank statement showed that $24600 of checks cleared the bank in July.
3. In September deposits per the bank statement totaled $40100 deposits per books were $38100 and deposits in transit at September 30 were $2900.
4. In September cash disbursements per books were $36550 checks clearing the bank were $37500 and outstanding checks at September 30 were $3200.
There were no bank debit or credit memoranda. No errors were made by either the bank or Jasmin Company.
Instructions
Answer the following questions.
(a) In situation (1) what were the deposits in transit at July 31?
(b) In situation (2) what were the outstanding checks at July 31?
(c) In situation (3) what were the deposits in transit at August 31?
(d) In situation (4) what were the outstanding checks at August 31?

Accepted Answer

(c) Deposi

Question 15

Match between columns
                        Premises: Compare checks to invoices.
Different individuals approve and make payments.
Print check amounts by machine with indelible ink.
Only designated personnel are authorized to sign checks.
Each check must have approved invoice.
Requiring employees to take vacations.

Accepted Answer

The Answer of Establishment of responsibility and Segregation of duties is...

Question 16

Sylvan Company wrote checks totaling $26520 during October and $25779 during November. $23460 of these checks cleared the bank in October and $26330 cleared the bank in November. What was the amount of outstanding checks on November 30?

Accepted Answer

A)  $741 
B)  $3060 
C)  $2509 
D)  $2870 
A)  $741 
B)  $3060 
C)  $2509 
D)  $2870

Question 17

Which one of the following items would not be considered cash?

Accepted Answer

A)  Coins 
B)  Money orders 
C)  Currency 
D)  All of these choices are considered cash. 
A)  Coins 
B)  Money orders 
C)  Currency 
D)  All of these choices are considered cash.

Question 18

Employees who handle cash should be ______________ in order to protect against misappropriation of assets by dishonest employees.

Accepted Answer

The answer of Employees who handle cash should be ______________...

Question 19

Internal control over cash disbursements is more effective when payments are made by ______________ rather than by ______________.

Accepted Answer

The answer of Internal control over cash disbursements is more...

Question 20

The cash balance per books for Potter Company on September 30 2015 is $10740.93. The following checks and receipts were recorded for the month of October 2015:   In addition the bank statement for the month of October is presented below:   Check No. 28 was correctly written for $707.62 for a payment on account. The NSF check was from M. Short a customer in settlement of an accounts receivable. An entry had not been made for the NSF check. The credit memo is for the collection of a note receivable including interest of $80 which has not been accrued. The bank service charge is $25.00.
Instructions
(a) Prepare a bank reconciliation at October 31.
(b) Prepare the adjusting journal entries required by the bank reconciliation.

Accepted Answer

The answer of The cash balance per books for Potter...

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled checks.

Control over cash disbursements is improved if major expenditures are paid by check.

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

Under a voucher system a prenumbered voucher is prepared for every

Proper control for over-the-counter cash receipts includes

Ella Company wrote checks totaling $36140 during October and $37030 during November. $34280 of these checks cleared the bank in October and $34640 cleared the bank in November. What was the amount of outstanding checks on November 30?

The use of remittance advices for mail receipts is an example of

Having one person responsible for the related activities of ordering merchandise receiving goods and paying for them

Sylvan Company wrote checks totaling $26520 during October and $25779 during November. $23460 of these checks cleared the bank in October and $26330 cleared the bank in November. What was the amount of outstanding checks on November 30?

Which one of the following items would not be considered cash?

Employees who handle cash should be ______________ in order to protect against misappropriation of assets by dishonest employees.

Internal control over cash disbursements is more effective when payments are made by rather than by .

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

Exam 8: Fraud, Internal Control, and Cash

A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled checks.

Control over cash disbursements is improved if major expenditures are paid by check.

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry:

Under a voucher system a prenumbered voucher is prepared for every

Proper control for over-the-counter cash receipts includes

Ella Company wrote checks totaling $36140 during October and $37030 during November. $34280 of these checks cleared the bank in October and $34640 cleared the bank in November. What was the amount of outstanding checks on November 30?

The use of remittance advices for mail receipts is an example of

Having one person responsible for the related activities of ordering merchandise receiving goods and paying for them

Sylvan Company wrote checks totaling $26520 during October and $25779 during November. $23460 of these checks cleared the bank in October and $26330 cleared the bank in November. What was the amount of outstanding checks on November 30?

Which one of the following items would not be considered cash?

Employees who handle cash should be ______________ in order to protect against misappropriation of assets by dishonest employees.

Internal control over cash disbursements is more effective when payments are made by ______________ rather than by ______________.

Accounting in Action

The Recording Process

Adjusting the Accounts

Completing the Accounting Cycle

Accounting for Merchandising Operations

Inventories

Accounting Information Systems

Accounting for Receivables

Plant Assets, Natural Resources, and Intangible Assets

Current Liabilities and Payroll Accounting

Accounting for Partnerships

Corporations: Organization and Capital Stock Transactions

Corporations: Dividends, Retained Earnings, and Income Reporting

Long-Term Liabilities

Investments

Statement of Cash Flows

Financial Statement Analysis

Managerial Accounting

Job Order Costing

Process Costing

Cost-Volume-Profit

Budgetary Planning

Budgetary Control and Responsibility Accounting

Standard Costs and Balanced Scorecard

Incremental Analysis and Capital Budgeting

Time Value of Money

Filters

Internal control over cash disbursements is more effective when payments are made by rather than by .