Question 1
How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?
A. They would be added to the balance of the bank statement.
B. They would be subtracted from the balance of the bank statement.
C. They would be added to the balance per books.
D. They would be ignored.
Question 2
A bank statement includes bank charges. On the bank reconciliation, the item is a/an
A. addition to the balance per company books.
B. addition to the balance per bank statement.
C. deduction from the balance per bank statement.
D. deduction from the balance per company books.
Question 3
Using the following information, calculate the adjusted cash balance at the end of April.
|
Bank statement ending cash balance
|
$2,000
|
|
General ledger cash balance ending
|
3,250
|
|
Bank monthly service charge
|
45
|
|
Deposits in transit
|
2,500
|
|
Outstanding checks
|
1,500
|
|
NSF check returned with bank statement
|
205
|
A. $3,000
B. $4,250
C. $4,000
D. $5,500
Question 4
Scotch Services received a credit memorandum from the bank. During the bank reconciliation, it should
A. increase its cash account on the company's books.
B. decrease its cash account on the company's books.
C. increase the ending cash balance on the bank statement.
D. decrease the ending cash balance on the bank statement.
Question 5
Checks that have been processed by the bank and are no longer negotiable are
A. outstanding checks.
B. canceled checks.
C. checks in process.
D. blank checks.
Question 6
The first two numbers of the ABA code listed on the check represent the
A. Federal Reserve District.
B. check number.
C. routing number.
D. account number.
Question 7
Using the following information, determine the adjusted cash balance per bank for Santa's Packaging on November 30.
|
Cash balance on the bank statement
|
$2,350
|
|
Customer's check returned-NSF
|
500
|
|
Customer's note collected by the bank
|
600
|
|
Deposits in transit, November 30
|
1,400
|
|
Outstanding checks, November 30
|
2,650
|
A. $1,250
B. $1,100
C. $1,550
D. $1,350
Question 8
On a bank reconciliation, deposits added to the bank side are called
A. deposits in transit.
B. late deposits.
C. deposits on hold.
D. outstanding deposits.
Question 9
Internal control over a company's assets should include which of the following?
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 the above
Question 10
If the bank charged another company's check against Shoe Depot's account, this would be included on the bank reconciliation as a/an
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 11
A blank endorsement on a check
A. can be further endorsed by someone else.
B. cannot be further endorsed by someone else.
C. is the safest type of endorsement.
D. permits only the original endorser to get the money.
Question 12
Advantages of online banking include
A. convenience.
B. transaction speed.
C. effectiveness.
D. All of the above
Question 13
If the written amount on the check doesn't match the amount expressed in figures, the bank may
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
Question 14
A restrictive endorsement on a check
A. can be further endorsed by someone else.
B. is the safest endorsement for businesses.
C. permits the bank to use its best judgment.
D. None of the above
Question 15
From the bank reconciliation, no entry was recorded for deposits in transit. This would cause
A. assets to be overstated.
B. assets to be understated.
C. no impact since deposits in transit are already included in the balance per books.
D. no impact since deposits aren't recorded on the books.
Question 16
Company policy for internal control should include all of the following except for which one?
A. Employees will be rotated.
B. Monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks.
C. The owner (or responsible employee) signs all checks after receiving authorization to pay from the departments concerned.
D. At time of payment, all supporting invoices or documents will be stamped "paid."
Question 17
The bank statement shows
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 the above
Question 18
The journal entry to reverse the entry of a customer's nonsufficient-funds check would include a
A. debit to Cash.
B. credit to Cash.
C. debit to Accounts Payable.
D. credit to Accounts Receivable.
Question 19
A full endorsement on a check
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. None of the above
Question 20
Outstanding checks
A. have been subtracted on the bank records but not the checkbook records.
B. haven't been presented to the bank for payment and haven't been subtracted from the checkbook.
C. haven't been presented to the bank for payment but have been subtracted in the checkbook.
D. have been returned to the business for nonpayment.