Question: 1. A check for $342 was erroneously charged by the bank as $432. In order for the bank reconciliation to balance, you must add $90 to the bank statement balance.
True or False
2. A check outstanding for two consecutive months will appear only on the first month's bank reconciliation.
True or False
3. In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal for an amount larger than the amount of the check is added to the balance per company's records.
True or False
4. A petty cash fund is used to pay relatively large amounts.
True or False
5. Money market accounts, commercial paper, and U. S. Treasury bills are examples of cash equivalents.
True or False
6. Sarbanes-Oxley applies to:
A. privately held businesses
B. not-for-profit organizations
C. All of these choices are correct.
D. publicly held companies
7. Which one of the following reflects a weak internal control system?
A. all employees must take their vacations
B. all employees are well supervised
C. a single employee is responsible for comparing a receiving report to an invoice
D. a single employee is responsible for collecting and recording of cash
8. An element of internal control is
A. journals
B. controlling accounts
C. risk assessment
D. subsidiary ledgers
9. A check drawn by a company for $340 in payment of a liability was recorded in the journal as $430. What entry is required in the company's accounts?
A. debit Cash; credit Accounts Receivable
B. debit Cash; credit Accounts Payable
C. debit Accounts Payable; credit Cash
D. debit Accounts Receivable; credit Cash
10. Accompanying the bank statement was a debit memo for bank service charges. What entry is required in the company's accounts?
A. debit Miscellaneous Administrative Expense; credit Cash
B. debit Cash; credit Accounts Payable
C. debit Accounts Payable; credit Cash
D. debit Cash; credit Other Income
11. The amount of the outstanding checks is included on the bank reconciliation as a(n)
A. addition to the balance per bank statement
B. deduction from the balance per company's records
C. addition to the balance per company's records
D. deduction from the balance per bank statement
12. Which of the following would be subtracted from the balance per books on a bank reconciliation?
A. notes collected by the bank
B. deposits in transit
C. error in recording a check for $732 as $723
D. outstanding checks