Question 1

Which of the following items would require a journal entry following preparation of the bank reconciliation statement?

Accepted Answer

A)  Error by the bank 
B)  Error by the company 
C)  Unpresented cheques at end of the month 
D)  Receipts not yet banked 
A)  Error by the bank 
B)  Error by the company 
C)  Unpresented cheques at end of the month 
D)  Receipts not yet banked

Question 2

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a cheque for $952 in payment of a supplier's account that was erroneously entered as $592 in the company's books is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Question 3

Which of the following is NOT true of a sound system of internal control?

Accepted Answer

A)  Implementation of controls involves costs. 
B)  A sound system of internal control is the responsibility of management. 
C)  All errors and irregularities should be eliminated. 
D)  A sound system of internal control is fundamental to the production of reliable financial reports. 
A)  Implementation of controls involves costs. 
B)  A sound system of internal control is the responsibility of management. 
C)  All errors and irregularities should be eliminated. 
D)  A sound system of internal control is fundamental to the production of reliable financial reports.

Question 4

Alison Ltd's bank statement showed a debit balance of $7000 at 31 December. It also showed bank service charges of $1100 and a direct credit received from a customer for the company amounting to $300. Unpresented cheques were $700 and there was an outstanding deposit for $2300. What was the final bank balance in Alison Ltd's ledger at 31 December?

Accepted Answer

A)  $5400 Dr 
B)  $5400 Cr 
C)  $8600 Dr 
D)  $8600 Cr 
A)  $5400 Dr 
B)  $5400 Cr 
C)  $8600 Dr 
D)  $8600 Cr

Question 5

Simon Ltd's bank statement showed a credit balance of $14 000 at 31 October. It also showed bank service charges of $2200 and a direct credit received from a customer amounting to $600. Unpresented cheques were $1400 and there was an outstanding deposit for $4600. What was the final bank balance in Simon Ltd's ledger at 31 October?

Accepted Answer

A)  $10800 Dr 
B)  $10800 Cr 
C)  $17200 Dr 
D)  $17200 Cr 
A)  $10800 Dr 
B)  $10800 Cr 
C)  $17200 Dr 
D)  $17200 Cr

Question 6

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a cheque outstanding at end of month, $450, is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Question 7

In preparing the monthly bank reconciliation, Fur Ltd ascertains that there is a $750 cheque from Hunt Traders for merchandise that is marked NSF. The journal entry to record this in Fur Ltd's books is:

Accepted Answer

A)  Dr Accounts receivable
$750
Cr Cash
$750 
B)  Dr Accounts receivable
$750
Cr Inventory
$750 
C)  Dr Accounts payable
$750
Cr Cash
$750 
D)  Cr Accounts receivable
$750
Dr Cash
$750 
A)  Dr Accounts receivable
$750
Cr Cash
$750 
B)  Dr Accounts receivable
$750
Cr Inventory
$750 
C)  Dr Accounts payable
$750
Cr Cash
$750 
D)  Cr Accounts receivable
$750
Dr Cash
$750

Question 8

Simon Ltd's bank statement showed a credit balance of $14 000 at 31 October. It also showed bank service charges of $2200 and a direct credit received from a customer amounting to $600. Unpresented cheques were $1400 and there was an outstanding deposit for $4600. What was the bank balance in Simon Ltd's books at 31 October before the adjustments?

Accepted Answer

A)  $15600 Dr 
B)  $15800 Cr 
C)  $17200 Cr 
D)  $18800 Dr 
A)  $15600 Dr 
B)  $15800 Cr 
C)  $17200 Cr 
D)  $18800 Dr

Question 9

Included in the bank statement was a debit for bank service charges. What entry is required in the company's accounts?

Accepted Answer

A)  Dr Bank charges
Cr Cash 
B)  Dr Cash
Cr Other revenue 
C)  Dr Cash
Cr Accounts payable 
D)  Dr Accounts payable
Cr Cash 
A)  Dr Bank charges
Cr Cash 
B)  Dr Cash
Cr Other revenue 
C)  Dr Cash
Cr Accounts payable 
D)  Dr Accounts payable
Cr Cash

Question 10

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for monthly service charge appearing on the bank statement, $45, is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Question 11

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for dividend on shares, $1200, deposited directly into the bank account, appearing on the bank statement is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Question 12

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: Segregation of duties involve:

Accepted Answer

A)  clearly establishing responsibility lines. 
B)  maintaining effective records. 
C)  separating record-keeping from handling of assets. 
D)  physically protecting sensitive assets. 
A)  clearly establishing responsibility lines. 
B)  maintaining effective records. 
C)  separating record-keeping from handling of assets. 
D)  physically protecting sensitive assets.

Question 13

The debit recorded in the journal to reimburse the petty cash fund is to:

Accepted Answer

A)  petty cash. 
B)  accounts receivable. 
C)  cash. 
D)  various accounts for which the petty cash was disbursed. 
A)  petty cash. 
B)  accounts receivable. 
C)  cash. 
D)  various accounts for which the petty cash was disbursed.

Question 14

Included in the bank statement was a credit received from a customer to settle their account. What entry is required in the company's accounts?

Accepted Answer

A)  Dr Cash
Cr Accounts receivable 
B)  Dr Cash
Cr Sales 
C)  Dr Accounts receivable
Cr Cash 
D)  Dr Sales
Cr Cash 
A)  Dr Cash
Cr Accounts receivable 
B)  Dr Cash
Cr Sales 
C)  Dr Accounts receivable
Cr Cash 
D)  Dr Sales
Cr Cash

Question 15

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: The practice of issuing identification cards to employees ensures:

Accepted Answer

A)  clear establishment of responsibility lines. 
B)  maintenance of effective records. 
C)  separation of record-keeping from handling assets. 
D)  physical protection of sensitive assets. 
A)  clear establishment of responsibility lines. 
B)  maintenance of effective records. 
C)  separation of record-keeping from handling assets. 
D)  physical protection of sensitive assets.

Question 16

Included in the bank statement was a debit for the current month's electricity usage. What entry is required in the company's accounts?

Accepted Answer

A)  Dr Electricity expense
Cr Cash 
B)  Dr Cash
Cr Electricity revenue 
C)  Dr Cash
Cr Electricity expense 
D)  Dr Accounts payable
Cr Cash 
A)  Dr Electricity expense
Cr Cash 
B)  Dr Cash
Cr Electricity revenue 
C)  Dr Cash
Cr Electricity expense 
D)  Dr Accounts payable
Cr Cash

Question 17

Which of the following statements about the bank statement is NOT true?

Accepted Answer

A)  The bank statement shows the amount payable by the customer. 
B)  The bank statement summarises the activity in a cheque account. 
C)  If the customer of the bank has a substantial bank overdraft, the closing balance will normally be a debit. 
D)  It is the source document for bank charges. 
A)  The bank statement shows the amount payable by the customer. 
B)  The bank statement summarises the activity in a cheque account. 
C)  If the customer of the bank has a substantial bank overdraft, the closing balance will normally be a debit. 
D)  It is the source document for bank charges.

Question 18

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Question 19

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for $650 that a customer paid directly into the company's bank account is to:

Accepted Answer

A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records. 
A)  add it to the balance as per bank statement. 
B)  deduct it from the balance as per bank statement. 
C)  add it to the balance per company records. 
D)  deduct it from the balance per company records.

Which of the following items would require a journal entry following preparation of the bank reconciliation statement?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a cheque for $952 in payment of a supplier's account that was erroneously entered as $592 in the company's books is to:

Which of the following is NOT true of a sound system of internal control?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a cheque outstanding at end of month, $450, is to:

In preparing the monthly bank reconciliation, Fur Ltd ascertains that there is a $750 cheque from Hunt Traders for merchandise that is marked NSF. The journal entry to record this in Fur Ltd's books is:

Included in the bank statement was a debit for bank service charges. What entry is required in the company's accounts?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for monthly service charge appearing on the bank statement, $45, is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for dividend on shares, $1200, deposited directly into the bank account, appearing on the bank statement is to:

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: Segregation of duties involve:

The debit recorded in the journal to reimburse the petty cash fund is to:

Included in the bank statement was a credit received from a customer to settle their account. What entry is required in the company's accounts?

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: The practice of issuing identification cards to employees ensures:

Included in the bank statement was a debit for the current month's electricity usage. What entry is required in the company's accounts?

Which of the following statements about the bank statement is NOT true?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for $650 that a customer paid directly into the company's bank account is to:

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters

Exam 7: Internal Control and Cash

Which of the following items would require a journal entry following preparation of the bank reconciliation statement?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a cheque for $952 in payment of a supplier's account that was erroneously entered as $592 in the company's books is to:

Which of the following is NOT true of a sound system of internal control?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a cheque outstanding at end of month, $450, is to:

In preparing the monthly bank reconciliation, Fur Ltd ascertains that there is a $750 cheque from Hunt Traders for merchandise that is marked NSF. The journal entry to record this in Fur Ltd's books is:

Included in the bank statement was a debit for bank service charges. What entry is required in the company's accounts?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for monthly service charge appearing on the bank statement, $45, is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for dividend on shares, $1200, deposited directly into the bank account, appearing on the bank statement is to:

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: Segregation of duties involve:

The debit recorded in the journal to reimburse the petty cash fund is to:

Included in the bank statement was a credit received from a customer to settle their account. What entry is required in the company's accounts?

Indicate which of the features of an effective internal control system are involved in the practices set out in the following question: The practice of issuing identification cards to employees ensures:

Included in the bank statement was a debit for the current month's electricity usage. What entry is required in the company's accounts?

Which of the following statements about the bank statement is NOT true?

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for a deposit for $2300 not appearing on the bank statement is to:

In preparing a bank reconciliation statement for a business with a substantial bank balance, the appropriate treatment for $650 that a customer paid directly into the company's bank account is to:

Introduction to Financial Accounting

Measuring and Evaluating Financial Position and Financial Performance

The Double-Entry System

Record-Keeping

Accrual Accounting Adjustments

Financial Reporting Principles, Accounting Standards and Auditing

Accounts Receivable and Further Record-Keeping

Inventory

Noncurrent Assets

Liabilities

Completing the Balance Sheet

Revenue and Expense Recognition: Additional Concepts

The Statement of Cash Flows

Financial Statement Analysis

Accounting Policy Choices

Sustainability Reporting

Filters