Question 1

Which of the following bank reconciliation items would be reflected in a journal entry?

Accepted Answer

A) Error made by the bank 
B) Outstanding Checks 
C) Bank service charges 
D) Deposit in transit

Question 2

An employee assigned the responsibility for overseeing the petty cash fund is called the custodian.

Accepted Answer

A) True 
 B)False

Question 3

Deposits that have been added to the bank balance but not the checkbook balance are called deposits in transit.

Accepted Answer

A) True 
 B)False

Question 4

Bank interest earned on a checking account would be shown on a 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.

Question 5

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.

Question 6

Petty Cash is an asset shown on the balance sheet.

Accepted Answer

A) True 
 B)False

Question 7

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the nature of the account (permanent/temporary).
$$\begin{array}{l}
\text { Example: }\
\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Cash } & \text { Asset } & \text { Debit } & \text { Balance Sheet } & \text { Permanent } \
\hline
\end{array}
\end{array}$$
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \text { Change Fund } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 8

The bank statement included bank charges.On the bank reconciliation,the item is:

Accepted Answer

A) an addition to the balance per company books. 
B) an addition to the balance per bank statement. 
C) a deduction from the balance per bank statement. 
D) a deduction from the balance per company books.

Question 9

List at least five company policies that would be included in an internal control system.

Accepted Answer

The answer of List at least five company policies that...

Question 10

Prepare the required journal entries from the bank reconciliation below as of the end of January:
The balance per general ledger is $200
There is a debit memo for interest expense,$100
There is a debit memo for a customer's NSF check $375
Outstanding checks amount to $2,000
This month's service charge amounts to $75
Deposits in transit amount to $1,500

Accepted Answer

The answer of Prepare the required journal entries from the...

Question 11

When completing a bank reconciliation,explain why all adjustments to the checkbook balance require journal entries?

Accepted Answer

The answer of When completing a bank reconciliation,explain why all...

Question 12

Samantha's Tutoring Service's $200 petty cash fund has a shortage of $4.The facts are: $80 in valid receipts for expenses; $116 in coins and currency.The journal entry to replenish the petty cash fund would include a:

Accepted Answer

A) credit to Cash for $80. 
B) credit to Petty Cash for $84. 
C) credit to Cash Short/Over for $4. 
D) debit to Cash Short/Over for $4.

Question 13

Internal control over a company's assets should include the following policy:

Accepted Answer

A) Responsibilities and duties of employees will be divided. 
B) All cash receipts will be deposited into the bank the same day they arrive. 
C) All cash payments will be made by check (except petty cash). 
D) All of these answers are correct.

Question 14

Bank service charges would be shown on a 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.

Question 15

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.
-According to the above Scenario.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.

Question 16

Determine the reconciled bank balance given the following:
The balance per bank statement is $ 110
The balance per general ledger is $107
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

The answer of Determine the reconciled bank balance given the...

Question 17

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the nature of the account (permanent/temporary).
$$\begin{array}{l}
\text { Example: }\
\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Cash } & \text { Asset } & \text { Debit } & \text { Balance Sheet } & \text { Permanent } \
\hline
\end{array}
\end{array}$$
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Misc. Expense } & & & & \
\hline
\end{array}$$

Accepted Answer

The answer of For each of the following, identify in...

Question 18

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.
-According to the above Scenario.The adjusted cash balance at the end of August should be:

Accepted Answer

A) $9,810. 
B) $7,620. 
C) $7,980. 
D) $8,180.

Question 19

What is the difference between a debit and credit memorandum?

Accepted Answer

The answer of What is the difference between a debit...

Question 20

List and describe some of the electronic conveniences that we are now provided when doing our banking.

Accepted Answer

The answer of List and describe some of the electronic...

Exam 6: Banking Procedure and Control of Cash

Which of the following bank reconciliation items would be reflected in a journal entry?

An employee assigned the responsibility for overseeing the petty cash fund is called the custodian.

Deposits that have been added to the bank balance but not the checkbook balance are called deposits in transit.

Bank interest earned on a checking account would be shown on a bank reconciliation as:

A full endorsement on a check:

Petty Cash is an asset shown on the balance sheet.

The bank statement included bank charges.On the bank reconciliation,the item is:

List at least five company policies that would be included in an internal control system.

When completing a bank reconciliation,explain why all adjustments to the checkbook balance require journal entries?

Samantha's Tutoring Service's $200 petty cash fund has a shortage of $4.The facts are: $80 in valid receipts for expenses; $116 in coins and currency.The journal entry to replenish the petty cash fund would include a:

Internal control over a company's assets should include the following policy:

Bank service charges would be shown on a bank reconciliation as:

What is the difference between a debit and credit memorandum?

List and describe some of the electronic conveniences that we are now provided when doing our banking.