Question 1

The bank added 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) 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

Petty Cash is an asset shown on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 3

The entry to replenish a $300 petty cash fund, which has cash of $140 and valid receipts for $148, would include:

Accepted Answer

A) a credit to Cash for $160. 
B) a debit to Petty Cash for $160. 
C) a credit to Cash for $148. 
D) a credit to Petty Cash for $148. 
A) a credit to Cash for $160. 
B) a debit to Petty Cash for $160. 
C) a credit to Cash for $148. 
D) a credit to Petty Cash for $148.

Question 4

If a check marked NSF is returned from the bank, an adjusting entry crediting cash is needed.

Accepted Answer

A) True 
 B)False

Question 5

Indicate which effect(s)each situation will have:
1. New check written
2. Recorded in the general journal
3. Recorded in auxiliary petty cash record
4. Petty cash voucher prepared
-________ Replenishment of petty cash

Accepted Answer

The answer of Indicate which effect(s)each situation will have:
1. New...

Question 6

The bank statement shows:

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) All of these answers are correct. 
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) All of these answers are correct.

Question 7

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 8

Canceled checks are negotiable at the bank for the face value.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

What type of an account is the petty cash fund?

Accepted Answer

A) Revenue 
B) Expense 
C) Asset 
D) Liability 
A) Revenue 
B) Expense 
C) Asset 
D) Liability

Question 11

Endorsing a check:

Accepted Answer

A) guarantees payment. 
B) transfers the right to deposit or transfer cash. 
C) cancels the transaction. 
D) All of these answers are correct. 
A) guarantees payment. 
B) transfers the right to deposit or transfer cash. 
C) cancels the transaction. 
D) All of these answers are correct.

Question 12

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 13

The petty cash overage was not recorded. This would cause:

Accepted Answer

A) revenues to be overstated. 
B) revenues to be understated. 
C) expenses to be overstated. 
D) expenses to be understated. 
A) revenues to be overstated. 
B) revenues to be understated. 
C) expenses to be overstated. 
D) expenses to be understated.

Question 14

The May bank statement for Accounting Services shows a balance of $6,300, but the balance per books shows a cash balance of $7,980. Other information includes: 1. A check for $200 to pay the electric bill was recorded on the books as $20.
2. Included on the bank statement was a note collected by the bank for $400 plus interest of $30.
3. Checks outstanding totaled $260.
4. Bank service charges were $50.
5. Deposits in transit were $2,140.
Which item(s)will require a journal entry to update the balance in the Cash account?

Accepted Answer

A) Checks outstanding and deposits in transit 
B) Bank service charges, note collected by the bank, and deposits in transit 
C) Bank service charges, note collected by the bank, and error made by Accounting Services 
D) None of these answers are correct. 
A) Checks outstanding and deposits in transit 
B) Bank service charges, note collected by the bank, and deposits in transit 
C) Bank service charges, note collected by the bank, and error made by Accounting Services 
D) None of these answers are correct.

Question 15

Advantages of on-line banking include:

Accepted Answer

A) convenience. 
B) transaction speed. 
C) effectiveness. 
D) All of the above are correct. 
A) convenience. 
B) transaction speed. 
C) effectiveness. 
D) All of the above are correct.

Question 16

An error, on the company's books, in recording a $82 deposit as $28 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 17

A payment for $31 is incorrectly recorded on the checkbook stub as $13. The $18 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 18

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

Accepted Answer

A) received the deposits in transit. 
B) collects a note receivable from a customer. 
C) discovered a check that was deposited was returned for nonsufficient funds. 
D) None of these answers are correct. 
A) received the deposits in transit. 
B) collects a note receivable from a customer. 
C) discovered a check that was deposited was returned for nonsufficient funds. 
D) None of these answers are correct.

Question 19

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

Accepted Answer

A) pay the amount written in words. 
B) return the check unpaid. 
C) contact the drawer to see what was meant. 
D) All of the above are correct choices. 
A) pay the amount written in words. 
B) return the check unpaid. 
C) contact the drawer to see what was meant. 
D) All of the above are correct choices.

Question 20

If the owner of Que 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) Debit Revenue; credit Cash 
D) Debit cash; credit Revenue 
A) Debit Cash; credit Withdrawals 
B) Debit Withdrawals; credit Cash 
C) Debit Revenue; credit Cash 
D) Debit cash; credit Revenue

Exam 6: Banking Procedure and Control of Cash

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

Petty Cash is an asset shown on the balance sheet.

The entry to replenish a $300 petty cash fund, which has cash of $140 and valid receipts for $148, would include:

If a check marked NSF is returned from the bank, an adjusting entry crediting cash is needed.

Indicate which effect(s)each situation will have: 1. New check written 2. Recorded in the general journal 3. Recorded in auxiliary petty cash record 4. Petty cash voucher prepared -________ Replenishment of petty cash

The bank statement shows:

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

Canceled checks are negotiable at the bank for the face value.

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

What type of an account is the petty cash fund?

Endorsing a check:

The petty cash overage was not recorded. This would cause:

Advantages of on-line banking include:

An error, on the company's books, in recording a $82 deposit as $28 would be included on the bank reconciliation as a(n):

A payment for $31 is incorrectly recorded on the checkbook stub as $13. The $18 error should be shown on the bank reconciliation as:

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

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

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

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: the Conclusion of the Payroll Process

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, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters