Question 1

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

Accepted Answer

A)  receives the deposits in transit. 
B)  collects a note receivable from a customer. 
C)  discovers a check that was deposited was returned for nonsufficient funds. 
D)  issues a company electronic funds payment. 
A)  receives the deposits in transit. 
B)  collects a note receivable from a customer. 
C)  discovers a check that was deposited was returned for nonsufficient funds. 
D)  issues a company electronic funds payment.

Question 2

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 3

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

Accepted Answer

A) True 
 B)False

Question 4

The replenishment of the petty cash fund was recorded twice. This would cause:

Accepted Answer

A)  Expenses to be overstated. 
B)  Expenses to be understated. 
C)  Petty Cash to be overstated. 
D)  Petty Cash to be understated. 
A)  Expenses to be overstated. 
B)  Expenses to be understated. 
C)  Petty Cash to be overstated. 
D)  Petty Cash to be understated.

Question 5

Indicate which effect(s) each situation will have:

-________ Bought coffee and rolls for a business meeting and used petty cash

Accepted Answer

A) New check written 
B)  Recorded in the general journal 
C)  Recorded in auxiliary petty cash record 
D)  Petty cash voucher prepared 
A) New check written 
B)  Recorded in the general journal 
C)  Recorded in auxiliary petty cash record 
D)  Petty cash voucher prepared

Question 6

Which of the following bank reconciliation items would be reflected in a journal entry?

Accepted Answer

A)  Error made by the bank 
B)  Outstanding checks 
C)  Bank service charges 
D)  Deposit in transit 
A)  Error made by the bank 
B)  Outstanding checks 
C)  Bank service charges 
D)  Deposit in transit

Question 7

Jim's Limousines' entry to establish a $160 petty cash fund for the office would include a:

Accepted Answer

A)  debit to Cash for $160. 
B)  credit to Petty Cash for $160. 
C)  credit to Cash for $160. 
D)  debit to Office Expense for $160. 
A)  debit to Cash for $160. 
B)  credit to Petty Cash for $160. 
C)  credit to Cash for $160. 
D)  debit to Office Expense for $160.

Question 8

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

Accepted Answer

A) True 
 B)False

Question 9

An error, on the company's books, in recording a $52 deposit as $25 would be included on the bank reconciliation as a(n):

Accepted Answer

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

Question 10

The bank statement does NOT show:

Accepted Answer

A)  the beginning bank balance of the cash at the start of the month. 
B)  the checks the bank has paid and any deposits received. 
C)  any other charges or additions to the bank balance. 
D)  outstanding checks. 
A)  the beginning bank balance of the cash at the start of the month. 
B)  the checks the bank has paid and any deposits received. 
C)  any other charges or additions to the bank balance. 
D)  outstanding checks.

Question 11

Construct the bank reconciliation for Milton Company as of July 31, from the following information:

Accepted Answer

The answer of Construct the bank reconciliation for Milton Company...

Question 12

The Petty Cash account is used to pay for small items such as postage stamps and supplies.

Accepted Answer

A) True 
 B)False

Question 13

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 14

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts. The facts are: total cash register tapes $410; total coins and currency $416. The summary journal entry to record the day's transactions would include a:

Accepted Answer

A)  $410 debit to Cash; $6 debit to Cash Short and Over; and $416 credit to Service Revenue. 
B)  $416 debit to Cash; $6 credit to Cash Short and Over; and $410 credit to Service Revenue. 
C)  $416 debit to Cash and $416 credit to Service Revenue. 
D)  $410 debit to Cash and $410 credit to Service Revenue. 
A)  $410 debit to Cash; $6 debit to Cash Short and Over; and $416 credit to Service Revenue. 
B)  $416 debit to Cash; $6 credit to Cash Short and Over; and $410 credit to Service Revenue. 
C)  $416 debit to Cash and $416 credit to Service Revenue. 
D)  $410 debit to Cash and $410 credit to Service Revenue.

Question 15

Information to calculate the adjusted cash balance for Chris's Company is as follows:

Accepted Answer

A)  $2,910 
B)  $2,010 
C)  $2,310 
D)  $1,840 
A)  $2,910 
B)  $2,010 
C)  $2,310 
D)  $1,840

Question 16

A payment for $27 is incorrectly recorded on the checkbook stub as $72. The $45 error should be shown on the 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 17

What is the purpose of internal control?

Accepted Answer

Internal control helps a compa

Question 18

If the ending balance in the Cash Short and Over account is a debit, it indicates that cash shortages have exceeded cash overages for the period.

Accepted Answer

A) True 
 B)False

Question 19

How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?

Accepted Answer

A)  They would be added to the balance of the bank statement. 
B)  They would be subtracted from the balance of the bank statement. 
C)  They would be added to the balance per books. 
D)  They would be subtracted from the balance per books. 
A)  They would be added to the balance of the bank statement. 
B)  They would be subtracted from the balance of the bank statement. 
C)  They would be added to the balance per books. 
D)  They would be subtracted from the balance per books.

Question 20

The drawee of a check is normally the company that issues the check.

Accepted Answer

A) True 
 B)False

Exam 6: Banking Procedure and Control of Cash

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

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

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

The replenishment of the petty cash fund was recorded twice. This would cause:

Indicate which effect(s) each situation will have: -________ Bought coffee and rolls for a business meeting and used petty cash

Which of the following bank reconciliation items would be reflected in a journal entry?

Jim's Limousines' entry to establish a $160 petty cash fund for the office would include a:

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

An error, on the company's books, in recording a $52 deposit as $25 would be included on the bank reconciliation as a(n):

The bank statement does NOT show:

Construct the bank reconciliation for Milton Company as of July 31, from the following information:

The Petty Cash account is used to pay for small items such as postage stamps and supplies.

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

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts. The facts are: total cash register tapes $410; total coins and currency $416. The summary journal entry to record the day's transactions would include a:

Information to calculate the adjusted cash balance for Chris's Company is as follows:

A payment for $27 is incorrectly recorded on the checkbook stub as $72. The $45 error should be shown on the bank reconciliation as:

What is the purpose of internal control?

If the ending balance in the Cash Short and Over account is a debit, it indicates that cash shortages have exceeded cash overages for the period.

How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?

The drawee of a check is normally the company that issues the check.

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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