Question 1 (5 points)
The drawee is the __________.
Question 1 options:
person who writes the check
bank that drawer has an account with
the person to whom the check is payable
the person who reconciles the account
Question 2 (5 points)
A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement?
Question 2 options:
It is added to the bank balance.
It is shown as a debit memo.
It is shown as a credit memo.
None of these answers are correct.
Question 3 (5 points)
Which of the following bank reconciliation items would be reflected in a journal entry?
Question 3 options:
error made by the bank
outstanding checks
bank service charges
deposit in transit
Question 4 (5 points)
A restrictive endorsement on a check __________.
Question 4 options:
can be further endorsed by someone else
is the safest endorsement for businesses
permits the bank to use its best judgment
None of these answers are correct.
Question 5 (5 points)
The bank statement shows __________.
Question 5 options:
the beginning bank balance of the cash at the start of the month
the checks the bank has paid and any deposits received
any other charges or additions to the bank balance
All of these answers are correct.
Question 6 (5 points)
From the bank reconciliation no entry was recorded for deposits in transit. This would cause __________.
Question 6 options:
assets to be overstated
assets to be understated
no impact since deposits in transit are already included in the balance per books
no impact since deposits are not recorded on the books
Question 7 (5 points)
Endorsing a check __________.
Question 7 options:
guarantees payment
transfers the right to deposit or transfer cash
cancels the transaction
All of these answers are correct.
Question 8 (5 points)
Which item(s. will require a journal entry to update the balance in the Cash account?
Question 8 options:
checks outstanding and deposits in transit
bank service charges, note collected by the bank, and deposits in transit
bank service charges, note collected by the bank, and error made by Accounting Services
None of these answers are correct.
Question 9 (5 points)
Determine the adjusted cash balance per bank for Santa’s Packaging on November 30, from the following information.
Cash balance on the bank statement
$2,350
Customer’s check returnedNSF
500
Customer’s note collected by the bank
600
Deposits in transit, November 30
1,400
Outstanding checks, November 30
2,650
Question 9 options:
$1,250
$1,100
$1,550
$1,350
Question 10 (5 points)
How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?
Question 10 options:
They would be added to the balance of the bank statement.
They would be subtracted from the balance of the bank statement.
They would be added to the balance per books.
They would be ignored.
Question 11 (5 points)
If the written amount on the check does not match the amount expressed in figures, the bank may __________.
Question 11 options:
pay the amount written in words
return the check unpaid
contact the drawer to see what was meant
All of these answers are correct.
Question 12 (5 points)
The check is written and signed by the __________.
Question 12 options:
drawer
drawee
payee
payer
Question 13 (5 points)
Advantages of on-line banking include __________.
Question 13 options:
convenience
transaction speed
effectiveness
All of the above answers are correct.
Question 14 (5 points)
Which item should be added to the company’s book balance during the bank reconciliation?
Question 14 options:
deposit in transit
check outstanding
bank service charge
note collected by the bank
Question 15 (5 points)
Calculate, from the following information 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
Question 15 options:
$3,000
$4,250
$4,000
$5,500
Question 16 (5 points)
Scotch Services received a credit memorandum from the bank. During the bank reconciliation they should __________.
Question 16 options:
increase their cash account on the company’s books
decrease their cash account on the company’s books
increase the ending cash balance on the bank statement
decrease the ending cash balance on the bank statement
Question 17 (5 points)
On a bank reconciliation, deposits added to the bank side are called __________.
Question 17 options:
deposits in transit
late deposits
deposits on hold
outstanding deposits
Question 18 (5 points)
Company policy for internal control should include all of the following EXCEPT for what?
Question 18 options:
Employees will be rotated.
Monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks.
The owner (or responsible employee. signs all checks after receiving authorization to pay from the departments concerned.
At time of payment, all supporting invoices or documents will be stamped "paid."
Question 19 (5 points)
The bank statement included bank charges. On the bank reconciliation, the item is __________.
Question 19 options:
an addition to the balance per company books
an addition to the balance per bank statement
a deduction from the balance per bank statement
a deduction from the balance per company books
Question 20 (5 points)
A full endorsement on a check __________.
Question 20 options:
is the same as a blank endorsement
can be endorsed only by the person or company named in the original endorsement
is the safest endorsement for businesses
does none of the above
