Deck 6: Banking and Budgeting

Question 1

Timing plays no role in differences between reconciling checkbook balances and bank balances.

Answer 1

False

Question 2

A check stub is completed after the check is written so records will be up to date.

Answer 2

False

Question 3

Photocopies of the front and back of canceled checks are acceptable evidence of payment for courts as well as IRS audits.

Answer 3

True

Question 4

NSF results in a bank crediting one's account.

Question 5

Online banking is always safe.

Question 6

All checking accounts earn interest.

Question 7

Mobile banking is increasing today.

Question 8

Crediting an account by the bank means a decrease to that account.

Question 9

The payee is the person to whom the check is payable.

Question 10

All checks are required to have a preprinted check number.

Question 11

A full endorsement is as safe as the restrictive endorsement.

Question 12

ATM's have completely replaced the need for tellers.

Question 13

Overdraft protection could be a positive factor if a deposit in transit occurs.

Question 14

Outstanding checks have not reached the bank for processing by the time the bank statement has been prepared.

Question 15

A reconciled balance is found on the front side of a bank statement.

Question 16

Electronic funds transfer does not use paper checks.

Question 17

The use of smartphones in banking is decreasing.

Question 18

Deposits in transit are the result of outstanding checks.

Question 19

A blank endorsement is the safest type of endorsement.

Question 20

An endorsement may be in writing or by the use of a company stamp.

Question 21

An unrecorded credit memo for collection of a note should be:

A) Ignored
B) Subtracted from checkbook balance
C) Added to checkbook balance
D) Added to bank balance
E) None of these

Question 22

Budgets are used to plan monthly cash flow.

Question 23

The bank statement of Ali Co. indicated a current balance of $32,900.10. The current checkbook balance indicated a balance of $34,509.11. In the reconciliation process a deposit in transit for $6,821.11 was discovered. Check number 600 for $3,988.33 was outstanding. The statement also revealed an NSF of $110.11 along with interest earned by Ali of $1,333.88. The reconciled balance is:

A) $35,237.88
B) $34,237.88
C) $35,723.88
D) $35,732.88
E) None of these

Question 24

The bank statement for Mat Co. revealed a balance of $900, and the checkbook balance showed $1,420. Checks outstanding totaled $35. A check printing charge for $5 was on the bank statement. There was a $50 NSF shown on the bank statement. There was a $500 deposit in transit. What is the reconciled balance?

A) $1,045
B) $1,095
C) $1,040
D) $1,545
E) None of these

Question 25

Citizen Bank sent a bank statement to Bane Co. showing an ending balance of $1,480. On the bank statement there was a service charge of $20. The bookkeeper of Bane Co. noticed in the reconciliation process a deposit in transit of $200 along with checks outstanding of $300. Complete the reconciliation for Bane assuming a beginning balance of $1,400.

A) $1,830.00
B) $1,138.00
C) $1,380.00
D) $1,803.00
E) None of these

Question 26

On December 31 the checkbook balance of Ray Co. was $5,420.95. The bank statement balance showed $5,102.88. Checks outstanding totaled $813.53. The statement did not show a deposit in transit of $1,102.95. Check charges were $15.88. The company earned interest income of $29.32 that was shown on the report. The bookkeeper forgot to record a check for $42.09. The reconciled balance is:

A) $5,392.30
B) $5,923.03
C) $5,932.03
D) $5,392.03
E) None of these

Question 27

A profit occurs when expenses exceed revenue.

Question 28

The checkbook balance of Lester Co. was $922.55. The bank statement revealed a balance of $3,881.14. The bank statement showed interest earned of $77 and a service charge of $38.22, along with a deposit in transit of $9,555.88. Outstanding checks totaled $6,142.88. The bookkeeper in further analyzing the bank statement noticed a collection of a note by the bank for $6,815.00. Lester Co. forgot to deduct a check for $482.19 during the month. The reconciled balance is:

A) $7,924.14
B) $7,429.18
C) $7,294.14
D) $7,429.14
E) None of these

Question 29

Online banking

A) Is never accepted by all banks
B) Still holds checks for 10 days
C) Is usually safe
D) Is very unsafe
E) None of these

Question 30

Electronic funds transfer:

A) Uses paper checks
B) Uses some paper checks
C) Does not use paper checks
D) Is a manual transfer system
E) None of these

Question 31

Jill Gracie's current checkbook balance is $8,900.15. She opened up the bank statement and saw the bank's balance at $7,000.10. After reviewing her records with the bank statement, she discovered a deposit on July 1 not recorded on the statement for $9,821.55. A check written for $7,986.05 had not been returned by the bank. This month the company earned interest of $33.10. The bank charged the company $48.10 for printing new checks. Jill also discovered that a check written for $49.55 was not recorded in the check stubs. The reconciled balance is:

A) $8,835.60
B) $8,358.60
C) $8,735.60
D) $8,835.06
E) None of these

Question 32

Jim Lee received his bank statement from Bayne Bank indicating a balance of $7,980. Lee's checkbook showed a balance of $6,800. Jim noticed that checks outstanding were $1,330. The bank statement also revealed an NSF check for $120 and a service charge of $30. The reconciled balance is:

A) $6,560
B) $6,530
C) $6,950
D) $6,650
E) None of these

Question 33

The beginning checkbook balance of Shelley Co. was $5,559.10. The bank statement showed a bank balance of $7,888.44. The bookkeeper of Shelley Co. noticed a $111.10 deposit in transit along with check numbers 90 and 97 for $499.88 and $1,256.45, respectively, as outstanding. The bank statement credited Shelley's account for $750.99 for a note collected. The bank statement revealed a check printing charge of $66.88. The reconciled balance is:

A) $6,423.12
B) $6,243.21
C) $6,423.21
D) $4,623.21
E) None of these

Question 34

Mia Wong's checking account had a balance of $3,100.55 on July 1. After looking at her bank statement, she noticed an NSF for $60.50, a service charge of $12.55, and a note collected for $600. There was one deposit in transit for $400 and no checks outstanding. What is the reconciled checkbook balance?

A) $3,527
B) $5,327.50
C) $3,627.50
D) $3,267.50
E) None of these

Question 35

Outstanding checks:

A) Have been paid by the bank
B) Are checks returned to the payor
C) Are bank checks
D) Have not been received by the bank for processing
E) None of these

Question 36

The bank statement of July 31 for Savon Co. showed a balance of $6,008.10, and the checkbook showed a balance of $1,900.40. The bookkeeper of Savon Co. noticed from the bank statement that the bank had collected a note for $666.66. There was a deposit in transit made on July 1 for $1,100.10 along with the outstanding checks of $4,580.54. Check charges were $39.40. The reconciled balance is:

A) $5,227.66
B) $2,572.66
C) $2,527.66
D) $5,272.66
E) None of these

Question 37

The process of analyzing the differences between the bank statement balance and the checkbook balance is:

A) Checks outstanding
B) Bank audit
C) Deposits in transit
D) Bank reconciliation
E) None of these

Question 38

In the reconciliation process the unrecorded bank service charge is:

A) Added to checkbook balance
B) Deducted from checkbook balance
C) Added to bank statement balance
D) Deducted from bank statement balance
E) None of these

Question 39

Which of the following results in crediting the checkbook balance?

A) NSF
B) Service charge
C) Interest earned
D) Overdraft protection charge
E) None of these

Question 40

From the following the reconciled balance is:

A) $74,959.10
B) $47,959.10
C) $74,459.10
D) $74,359.10
E) None of these

Question 41

From the following calculate the final balance that was to be carried forward in your check stubs as of the end of October:

Question 42

John Murray has a beginning checkbook balance of $110. The beginning bank balance is $135, and deposits in transit amounted to $50. Checks outstanding were $80. John also noticed a bank service charge of $5. What should the reconciled balance be?

Question 43

Abe Frill received a bank statement from the Cloudy Bank indicating a balance of $12,000. Abe's checkbook showed a balance of $11,200. Deposits in transit were $2,000, and checks outstanding totaled $2,900. The bank service charge was $100. Complete the reconciliation.

Question 44

Calculate the balance carried forward:

Question 45

On Dec. 31 the checkbook balance of Aster Co. was $1,241.05. The bank statement balance was $1,510. Checks outstanding were $3,052.03. The statement revealed a deposit in transit of $2,800.10 as well as a bank service charge of $12.03. The company earned interest income of $29.05. Complete a bank reconciliation for Aster Co.

Question 46

Calculate the statement balance:

Question 47

On May 31, 200x, Kane Company's bank statement showed a $9,900.50 bank balance. The bank statement also showed that it collected a $1,200 note for Kane Company. A $1,315.80 deposit made on May 31 was in transit. Check number 314 for $48.50 and check number 485 for $465.12 were outstanding. Kane's bank charges $.15 per processed check. This month Kane wrote 68 checks. Kane has a $9,512.88 checkbook balance. Prepare a reconciled balance.

Question 48

The checkbook balance of Roger Co. is $982.50. The bank statement reveals a balance of $1,051.82. The bank statement showed interest earned of $3.82 and a service charge of $15, along with a deposit in transit of $210. Outstanding checks totaled $270.50. The bookkeeper in further analyzing the bank statement noticed a collection of a note by the bank for $200. Roger Co. forgot to deduct a check for $180 during the month. The reconciled balance is:

A) $831.32
B) $991.32
C) $831.23
D) $991.23
E) None of these

Question 49

Calculate the balance carried forward:

Question 50

From the following, prepare a bank reconciliation for Blue Co.:
Service charge $20
Checks outstanding $1,460
NSF $200
Deposits in transit $2,080
Checkbook balance $4,000
Bank balance $3,160

Question 51

On Dec. 31 the checkbook balance of Rose Co. was $755.09. The bank statement balance was $602.05. Checks outstanding were $249.54. The statement revealed a deposit in transit of $401.95 as well as a bank service charge of $13.05. The company earned interest income of $12.42. Complete a bank reconciliation for Rose Co.

Question 52

On November 1, 200X, Broom Company received a bank statement that showed a $2,950 balance. Broom showed a $4,010 checking account balance. The bank did not return check number 124 for $1,080 and check number 138 for $720. A $3,200 deposit made on October 30 was in transit. The bank charged Broom $12 for check printing and $18 for an NSF check. Broom forgot to record a $30 withdrawal at the ATM. The bank also collected a $400 note for Broom. Prepare bank reconciliation.

Question 53

Valdez Company opened a special checking account. The charge for each check written was $.55 or a $6 a month minimum service charge (whichever is greater). At the beginning of the month, the company checkbook balance was $695.18. Valdez Company wrote 14 checks totaling $312.88. Deposits of $188.10 and $195.10 were made during the month. What is Valdez's checkbook balance to start the next month (include cost of check writing)?

Question 54

Jane Co.'s checkbook currently has a balance of $295.10. The bank statement shows a balance of $205.10. The statement revealed interest income of $10.03 along with check charges of $2.95. Jane recorded a $200 check as $150. Deposits in transit were $402.80. Check numbers 85, 88, and 92 for $90.80, $108.10, and $156.82 were not returned with the statement. The reconciled balance is:

A) $302.18
B) $242.18
C) $242.51
D) $252.18
E) None of these

Question 55

Andy Finn received a bank statement from Jon Bank indicating a balance of $3,000. Based on Finn's check stubs, the ending checkbook balance was $3,600. Checks outstanding were number 110 for $150, number 115 for $90, and number 118 for $75. Andy noticed a deposit in transit for $900 as well as a bank service charge for $15. Complete the reconciliation for Andy.

Question 56

Compute the reconciled balance:

Question 57

The checkbook of Vance Company had a balance of $2,210.55. The bank statement showed a balance of $4,918.18. The bank collected a $2,000 note minus a $5 service charge. There was a deposit in transit of $610.88. Several checks outstanding totaled $1,196.17. Vance collected $42.33 in interest on the checking account. Vance recorded a $300 check for $400. The bank service charge is $14.99. What is the adjusted reconciled balance?

Question 58

Calculate the balance carried forward:

Question 59

From the following, prepare a bank reconciliation for the J. Company:
Service charge $10
Checks outstanding $730
NSF $100
Deposits in transit $1,040
Checkbook balance $2,000
Bank balance $1,580

Question 60

On December 31, 200x, Brown Company's checkbook showed an $8,195.32 balance. Brown's bank statement showed a balance of $8,400.50. Check number 311 for $395.10 and check number 418 for $115.46 were outstanding. A $310.30 deposit was in transit. The bank charged a $10 service charge. The statement showed a $14.92 earned interest income. Complete Brown's bank reconciliation.

Question 61

David had the following activity with his checking account during the month of July:
-Starting checkbook balance of $701.13
-July 15 electronic payroll deposit of $1,807.44
-Online payment of $109.17 to Ameren Utilities
-Online payment of $104.00 to Gas Company
-Checks written on July 15 totaling $984.15
-On July 27 he received an electronic payroll deposit of $1,807.43
What was David's checkbook balance as of July 31?

Question 62

The beginning balance of the check register was $492.88. During the month, deposits were made for $210 and $499.88. Checks were written for $18.25, $19.82, and $309.82. Could you calculate the ending balance of the check register?

Question 63

John Small was looking over his bank statement and jotted down the following information:
Could you calculate the ending checkbook balance for John?

Question 64

As the bookkeeper of Moorse Co., you are asked to complete a bank reconciliation from the following: Outstanding checks $ 7,957.80

Question 65

Jodie has a checkbook balance of $733.17; she wrote a check payable to Finney's Gym for $24.99 on June 1 and another check for $382.77 payable to Ford Credit on June 10. On June 28, her payroll check from Maryville College for $2,210.54 was deposited electronically. What was her balance on June 28?

Question 66

Debbie's checkbook balance was $2,715.50. She wrote checks totaling $5,298.13 during the month of May. Deposits made during the month were $250.16 on May 1. On May 15, her payroll check was electronically processed for $2980.66; on May 22, a check from the IRS was electronically processed for $2,550. On May 27, she recorded $534.10 for payments debited to her account for auto insurance and utilities. What is her checkbook balance?

Question 67

Bill Morse had a balance of $422.88 in his check register. The bank notified him that Alice Wrong had insufficient funds to cover her check that Bill deposited. The bank indicated that Bill's bank balance was being reduced. Bill felt that this was unfair since he never "bounces" his own checks. Is he justified? Please explain.

Question 68

John Mills has asked you to compute his checkbook balance from the following:

Question 69

What is the expected cash profit or loss given the following information:
Expected merchandise sales (in cash) $125,000
Expected service sales (in cash) $80,000
Expected fixed cash expenses $75,000
Expected variable cash expenses $120,000

Question 70

Your monthly income is $1,950. You have developed the following list of anticipated cash costs for the month.
Mortgage $750, Car Payment $250, Car Insurance $75, Groceries $250, Cell Phone $120, Cable TV $35, Entertainment $65, 401k Contribution $300, Charitable Contribution $35, Miscellaneous unexpected costs $115.
What would you have to do about your anticipated spending?