Question 1

The bank deducted another company's check from our account. This 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 2

Determine the reconciled bank balance given the following:
The balance per bank statement is $ 195.
The balance per general ledger is $192.
There is a credit memo for a note collected, $408.
There is a credit memo for interest earned, $25.
There is a debit memo for a customer's NSF check $350.
Deposits in transit, $850.
Outstanding checks amount to $845.
This month's service charge amounts to $50.
There is a debit memo for check printing fees, $25.
$ ________

Accepted Answer

$200 [$195

Question 3

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

Question 4

A full endorsement on a check:

Accepted Answer

A)  is the same as a blank endorsement. 
B)  can be endorsed only by the person or company named in the original endorsement. 
C)  is the safest endorsement for businesses. 
D)  does none of the above. 
A)  is the same as a blank endorsement. 
B)  can be endorsed only by the person or company named in the original endorsement. 
C)  is the safest endorsement for businesses. 
D)  does none of the above.

Question 5

The bank charged another company's deposit to our account. This 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)  subtraction from the balance per bank. 
D)  addition to the balance per bank. 
A)  addition to the balance per books. 
B)  subtraction from the balance per books. 
C)  subtraction from the balance per bank. 
D)  addition to the balance per bank.

Question 6

If the owner of Pastel Legal Services forgot to deduct a withdrawal from the balance per books, what entry would be necessary?

Accepted Answer

A)  Debit Cash; credit Withdrawals 
B)  Debit Withdrawals; credit Cash 
C)  Customer collection taken by the bank 
D)  Debit Accounts Receivable; credit Cash 
A)  Debit Cash; credit Withdrawals 
B)  Debit Withdrawals; credit Cash 
C)  Customer collection taken by the bank 
D)  Debit Accounts Receivable; credit Cash

Question 7

Indicate which effect(s) each situation will have:

-________ Replenishment of 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 8

Indicate what effect each situation will have on the bank reconciliation process. Place the number of your choice beside the items listed.
1. Add to bank balance
2. Deduct from bank balance
3. Add to checkbook balance
4. Deduct from checkbook balance
________ a. deposit in transit
________ b. bank service charge
________ c. NSF check
________ d. Check written for $95 recorded on the company's ledger as $59
________ e. Outstanding checks
________ f. Check written for $80 recorded as $800
________ g. Check printing charges
________ h. Interest earned on checking account

Accepted Answer

a. 1, b. 4

Question 9

The check is written and signed by the:

Accepted Answer

A)  drawer. 
B)  drawee. 
C)  bank teller. 
D)  None of the above 
A)  drawer. 
B)  drawee. 
C)  bank teller. 
D)  None of the above

Question 10

An example of an internal control is NOT:

Accepted Answer

A)  the use of bank account. 
B)  the use of unnumbered checks. 
C)  all checks written must have reference source documents. 
D)  All of these answers are correct. 
A)  the use of bank account. 
B)  the use of unnumbered checks. 
C)  all checks written must have reference source documents. 
D)  All of these answers are correct.

Question 11

The credit recorded in the journal entry to establish the petty cash fund is to:

Accepted Answer

A)  Cash. 
B)  Petty Cash. 
C)  Accounts Payable. 
D)  Withdrawals. 
A)  Cash. 
B)  Petty Cash. 
C)  Accounts Payable. 
D)  Withdrawals.

Question 12

The Petty Cash account should never be debited when the fund is replenished.

Accepted Answer

A) True 
 B)False

Question 13

Checks that have been processed by the bank and are no longer negotiable are:

Accepted Answer

A)  outstanding checks. 
B)  canceled checks. 
C)  voided checks. 
D)  deposits in transit. 
A)  outstanding checks. 
B)  canceled checks. 
C)  voided checks. 
D)  deposits in transit.

Question 14

Which of the following accounts would most likely be debited in the replenishment of petty cash?

Accepted Answer

A)  Cash 
B)  Petty Cash 
C)  Postage Expense 
D)  Withdrawals 
A)  Cash 
B)  Petty Cash 
C)  Postage Expense 
D)  Withdrawals

Question 15

Indicate which effect(s) each situation will have:

-________ Filled up the company's truck with gas 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 16

From the bank reconciliation, no entry was recorded for a debit memo for a new check fee expense. This would cause:

Accepted Answer

A)  Cash to be understated. 
B)  liabilities to be overstated. 
C)  expenses to be understated. 
D)  expenses to be overstated. 
A)  Cash to be understated. 
B)  liabilities to be overstated. 
C)  expenses to be understated. 
D)  expenses to be overstated.

Question 17

The journal entry to record the entry of a customer's nonsufficient funds check would include a:

Accepted Answer

A)  debit to Revenue. 
B)  credit to Cash. 
C)  debit to Collection Expense. 
D)  credit to Accounts Receivable. 
A)  debit to Revenue. 
B)  credit to Cash. 
C)  debit to Collection Expense. 
D)  credit to Accounts Receivable.

Question 18

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 19

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 $20. 
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 $20. 
D)  debit to Petty Cash for $40.

Question 20

The drawee writes the check.

Accepted Answer

A) True 
 B)False

Exam 6: Banking Procedure and Control of Cash

The bank deducted another company's check from our account. This would be included on the bank reconciliation as a(n):

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

A full endorsement on a check:

The bank charged another company's deposit to our account. This would be included on the bank reconciliation as a(n):

If the owner of Pastel Legal Services forgot to deduct a withdrawal from the balance per books, what entry would be necessary?

Indicate which effect(s) each situation will have: -________ Replenishment of petty cash

The check is written and signed by the:

An example of an internal control is NOT:

The credit recorded in the journal entry to establish the petty cash fund is to:

The Petty Cash account should never be debited when the fund is replenished.

Checks that have been processed by the bank and are no longer negotiable are:

Which of the following accounts would most likely be debited in the replenishment of petty cash?

Indicate which effect(s) each situation will have: -________ Filled up the company's truck with gas and used petty cash

From the bank reconciliation, no entry was recorded for a debit memo for a new check fee expense. This would cause:

The journal entry to record the entry of a customer's nonsufficient funds check would include a:

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

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

The drawee writes 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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