Question 1

It is efficient, less costly, to pay small bills each day with cash available from a petty cash fund.

Accepted Answer

A) True 
 B)False

Question 2

In preparing its bank reconciliation at March 31, Valley Company has the following information:
 
What is the proper cash balance at March 31 for balance sheet purposes?

Accepted Answer

A)  $107,250 
B)  $110,250 
C)  $110,400 
D)  $111,150 
A)  $107,250 
B)  $110,250 
C)  $110,400 
D)  $111,150

Question 3

Use the following information to prepare a bank reconciliation for McGoo Company at August 31, 2019: 
(1) Cash account balance, $18,273.40.
(2) Bank statement balance, August 31, $16,315.00.
(3) Deposits in transit, $2,800.00.
(4) Outstanding checks, August 31, $1,850.80.
(5) Service charge on bank statement not recorded in books, $44.00.
(6) Bank error - another company's check charged on McGoo Company's bank statement, $245.20.
(7) Check for repairs expense, $1,680, incorrectly recorded in books as $960.00.

Accepted Answer

The answer of Use the following information to prepare a...

Question 4

Keyser, Inc.'s April bank statement shows an April 30 balance of $20,480. Prior to reconciliation, its books show a cash balance of $22,040. The information below pertains to Keyser, Inc.

The reconciled cash balance at April 30 on the bank reconciliation should be:

Accepted Answer

A)  $24,140 
B)  $18,680 
C)  $21,820 
D)  $22,280 
A)  $24,140 
B)  $18,680 
C)  $21,820 
D)  $22,280

Question 5

In reconciling the September bank statement, the vice president discovered that the bookkeeper had recorded a check written for $438 as $483 in the cash disbursements journal. For the bank reconciliation, the $45 error should be:

Accepted Answer

A)  Added to balance per bank statement 
B)  Added to balance per general ledger 
C)  Deducted from balance per bank statement 
D)  Deducted from balance per general ledger 
A)  Added to balance per bank statement 
B)  Added to balance per general ledger 
C)  Deducted from balance per bank statement 
D)  Deducted from balance per general ledger

Question 6

After completing a bank reconciliation, you are preparing journal entries to agree the Yankee Company's Cash account balance with the reconciled balance shown on the reconciliation.
Which of the following requires a journal entry?

Accepted Answer

A)  Service charges for the period 
B)  Outstanding checks at the end of the period 
C)  Deposits in transit at the end of the period 
D)  An error by the bank in recording one of the firm's deposits 
A)  Service charges for the period 
B)  Outstanding checks at the end of the period 
C)  Deposits in transit at the end of the period 
D)  An error by the bank in recording one of the firm's deposits

Question 7

Watkis Company received its February bank statement, which included a memo indicating that the check of Sarah Company for $652 had been returned as "NSF." Watkis' bank reconciliation should list this check as a(n):

Accepted Answer

A)  Addition to balance per bank statement 
B)  Deduction from balance per bank statement 
C)  Addition to balance per general ledger 
D)  Deduction from balance per general ledger 
A)  Addition to balance per bank statement 
B)  Deduction from balance per bank statement 
C)  Addition to balance per general ledger 
D)  Deduction from balance per general ledger

Question 8

Windham Company developed the following reconciling information in preparing its September bank reconciliation:
 
Using the above information, determine the cash balance per books (before adjustments) for Windham Company.

Accepted Answer

A)  $ 6,150 
B)  $24,000 
C)  $33,000 
D)  $17,550 
A)  $ 6,150 
B)  $24,000 
C)  $33,000 
D)  $17,550

Question 9

If the Four Corners Company's accountant mistakenly records a deposit of $383 as $838, the error would be shown on the bank reconciliation statement as a:

Accepted Answer

A)  $455 deduction from the book balance 
B)  $455 addition to the bank balance 
C)  $455 addition to the book balance 
D)  $455 deduction from the bank balance 
A)  $455 deduction from the book balance 
B)  $455 addition to the bank balance 
C)  $455 addition to the book balance 
D)  $455 deduction from the bank balance

Question 10

In reconciling the January bank statement, the vice president discovered that the bookkeeper had recorded a check written for $681 as $816 in the cash disbursements journal. For the bank reconciliation, the $135 error should be:

Accepted Answer

A)  Added to balance per bank statement 
B)  Added to balance per general ledger 
C)  Deducted from balance per bank statement 
D)  Deducted from balance per general ledger 
A)  Added to balance per bank statement 
B)  Added to balance per general ledger 
C)  Deducted from balance per bank statement 
D)  Deducted from balance per general ledger

Question 11

During its year-end bank reconciliation, Farley Company finds that Check No. 951 was written for $124.05 on the books, but the check was written and cleared the bank for the correct amount, $142.05.
The correct treatment on the bank reconciliation would be:

Accepted Answer

A)  On the bank side, deduct $18 from payments and add $18 to ending balance 
B)  On the book side, deduct $18 from receipts and add $18 to ending balance 
C)  On the book side, add $18 to payments and deduct $18 from ending balance 
D)  On the bank side, add $18 to receipts and add $18 to ending balance 
A)  On the bank side, deduct $18 from payments and add $18 to ending balance 
B)  On the book side, deduct $18 from receipts and add $18 to ending balance 
C)  On the book side, add $18 to payments and deduct $18 from ending balance 
D)  On the bank side, add $18 to receipts and add $18 to ending balance

Question 12

At May 31, Michaelis Company has outstanding checks totaling $19,600. The bank reconciliation for May should show these checks as a(n):

Accepted Answer

A)  Deduction from balance per bank statement 
B)  Addition to balance per bank statement 
C)  Addition to balance per general ledger 
D)  Deduction from balance per general ledger 
A)  Deduction from balance per bank statement 
B)  Addition to balance per bank statement 
C)  Addition to balance per general ledger 
D)  Deduction from balance per general ledger

Question 13

The following information was used in reconciling the bank account for Minerva Company on October 31:

Calculate the Adjusted Book Balance on October 31.

Accepted Answer

A)  $37,280 
B)  $33,440 
C)  $37,680 
D)  $36,080 
A)  $37,280 
B)  $33,440 
C)  $37,680 
D)  $36,080

Question 14

Bash Bowling Company prepares bank reconciliations that adjust to the correct balance of cash, based on the following:
 
Determine the adjusted cash balance.

Accepted Answer

A)  $7,498 
B)  $7,816 
C)  $7,462 
D)  $7,108 
A)  $7,498 
B)  $7,816 
C)  $7,462 
D)  $7,108

Question 15

Which of the following items would you add to the Flitter Company's bank statement balance to arrive at the reconciled cash balance in a bank reconciliation:

Accepted Answer

A)  Bank service charges 
B)  Outstanding and "NSF" checks 
C)  "NSF" checks Bank collection charges 
D)  None of the above 
A)  Bank service charges 
B)  Outstanding and "NSF" checks 
C)  "NSF" checks Bank collection charges 
D)  None of the above

Question 16

Marathon, Inc.'s April bank statement shows an April 30 balance of $15,360. Prior to reconciliation, its books show a cash balance of $16,530. The information below pertains to Marathon, Inc.
 
The reconciled cash balance at April 30 on the bank reconciliation should be:

Accepted Answer

A)  $18,105 
B)  $14,010 
C)  $16,365 
D)  $16,710 
A)  $18,105 
B)  $14,010 
C)  $16,365 
D)  $16,710

Question 17

Which of the following bank reconciliation items should not be added to or subtracted from the bank statement balance to determine the reconciled cash balance?

Accepted Answer

A)  Outstanding checks 
B)  Deposits in the mail but not yet received by the bank 
C)  Bank service charges 
D)  None of the above 
A)  Outstanding checks 
B)  Deposits in the mail but not yet received by the bank 
C)  Bank service charges 
D)  None of the above

Question 18

Which of the following would you deduct from the bank statement balance to arrive at the reconciled cash balance in a bank reconciliation:

Accepted Answer

A)  Bank service charges 
B)  Deposits in transit 
C)  "NSF" checks 
D)  Outstanding checks 
A)  Bank service charges 
B)  Deposits in transit 
C)  "NSF" checks 
D)  Outstanding checks

Question 19

In preparing its June 30, 2019 bank reconciliation, a company has available the following information:
 
As of June 30, the company's adjusted cash balance is:

Accepted Answer

A)  $66,600 
B)  $61,500 
C)  $66,300 
D)  $86,400 
A)  $66,600 
B)  $61,500 
C)  $66,300 
D)  $86,400

Question 20

Carl Nickolas Company prepares bank reconciliations that adjust to the correct balance of cash, based on the following:
 
Determine the adjusted cash balance.

Accepted Answer

A)  $22,494 
B)  $23,448 
C)  $22,386 
D)  $21,324 
A)  $22,494 
B)  $23,448 
C)  $22,386 
D)  $21,324

Exam 7: Internal Control and Cash

It is efficient, less costly, to pay small bills each day with cash available from a petty cash fund.

In preparing its bank reconciliation at March 31, Valley Company has the following information: What is the proper cash balance at March 31 for balance sheet purposes?

Keyser, Inc.'s April bank statement shows an April 30 balance of $20,480. Prior to reconciliation, its books show a cash balance of $22,040. The information below pertains to Keyser, Inc. The reconciled cash balance at April 30 on the bank reconciliation should be:

In reconciling the September bank statement, the vice president discovered that the bookkeeper had recorded a check written for $438 as $483 in the cash disbursements journal. For the bank reconciliation, the $45 error should be:

After completing a bank reconciliation, you are preparing journal entries to agree the Yankee Company's Cash account balance with the reconciled balance shown on the reconciliation. Which of the following requires a journal entry?

Watkis Company received its February bank statement, which included a memo indicating that the check of Sarah Company for $652 had been returned as "NSF." Watkis' bank reconciliation should list this check as a(n):

Windham Company developed the following reconciling information in preparing its September bank reconciliation: Using the above information, determine the cash balance per books (before adjustments) for Windham Company.

If the Four Corners Company's accountant mistakenly records a deposit of $383 as $838, the error would be shown on the bank reconciliation statement as a:

In reconciling the January bank statement, the vice president discovered that the bookkeeper had recorded a check written for $681 as $816 in the cash disbursements journal. For the bank reconciliation, the $135 error should be:

During its year-end bank reconciliation, Farley Company finds that Check No. 951 was written for $124.05 on the books, but the check was written and cleared the bank for the correct amount, $142.05. The correct treatment on the bank reconciliation would be:

At May 31, Michaelis Company has outstanding checks totaling $19,600. The bank reconciliation for May should show these checks as a(n):

The following information was used in reconciling the bank account for Minerva Company on October 31: Calculate the Adjusted Book Balance on October 31.

Bash Bowling Company prepares bank reconciliations that adjust to the correct balance of cash, based on the following: Determine the adjusted cash balance.

Which of the following items would you add to the Flitter Company's bank statement balance to arrive at the reconciled cash balance in a bank reconciliation:

Marathon, Inc.'s April bank statement shows an April 30 balance of $15,360. Prior to reconciliation, its books show a cash balance of $16,530. The information below pertains to Marathon, Inc. The reconciled cash balance at April 30 on the bank reconciliation should be:

Which of the following bank reconciliation items should not be added to or subtracted from the bank statement balance to determine the reconciled cash balance?

Which of the following would you deduct from the bank statement balance to arrive at the reconciled cash balance in a bank reconciliation:

In preparing its June 30, 2019 bank reconciliation, a company has available the following information: As of June 30, the company's adjusted cash balance is:

Carl Nickolas Company prepares bank reconciliations that adjust to the correct balance of cash, based on the following: Determine the adjusted cash balance.

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