Exam 6: Banking Procedure and Control of Cash

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: -

Prepare a bank reconciliation as of May 31 from the following information:

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. $ ________

Outstanding checks:

Which of the following transactions would most likely NOT be recorded in an auxiliary petty cash record?

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

Scotch Services received a credit memorandum from the bank. During the bank reconciliation they should:

The entry establishing a $220 petty cash fund would include a:

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

The Petty Cash account is debited when:

When completing a bank reconciliation, explain why all adjustments to the checkbook balance require journal entries?

The May bank statement for Accounting Services shows a balance of $6,200, but the balance per books shows a cash balance of $7,680. Other information includes: 1. A check for $190 to pay the electric bill was recorded on the books as $30. 2) Included on the bank statement was a note collected by the bank for $370 plus interest of $30. 3) Checks outstanding totaled $270. 4) Bank service charges were $50. 5) Deposits in transit were $1,880. The adjusted cash balance at the end of May should be:

Prepare the required journal entries from the bank reconciliation below as of the end of June: The balance per general ledger is $200. There is a debit memo for interest expense, $150. There is a debit memo for a customer's NSF check $240. Outstanding checks amount to $2,000. This month's service charge amounts to $50. Deposits in transit amount to $1,500.

A petty cash fund is set up:

The drawee is the:

A blank endorsement on a check:

Company policy for internal control should include all of the following except:

Any adjustment to the depositor's records because of an item on the bank statement requires a journal entry.

Transferring money without paper checks is called electronic funds transfer.

If the written amount on the check does NOT match the amount expressed in figures, the bank may: