Question 1

The entry in a firm's accounting records for a credit customer's check that was returned by the bank marked "NSF" would include

Accepted Answer

A)  a debit to Miscellaneous Expense and a credit to Cash. 
B)  a debit to Accounts Receivable and a credit to Accounts Payable. 
C)  a debit to Accounts Receivable and a credit to Cash. 
D)  a debit to Cash and a credit to Accounts Receivable. 
A)  a debit to Miscellaneous Expense and a credit to Cash. 
B)  a debit to Accounts Receivable and a credit to Accounts Payable. 
C)  a debit to Accounts Receivable and a credit to Cash. 
D)  a debit to Cash and a credit to Accounts Receivable.

Question 2

Grouping all transactions involving cash payments together in the cash payments journal strengthens the audit trail.

Accepted Answer

A) True 
 B)False

Question 3

If the amount of cash available for deposit is ____________________ than the amount listed on the audit tape taken from the cash register,the Cash Short or Over account is debited.

Accepted Answer

The answer of If the amount of cash available for...

Question 4

Read each of the following transactions.Determine the accounts to be debited and credited.
A)Issued a check for $10,600 to pay a $10,000 note plus interest of $600.
B)Issued a check for $1,500 to pay the monthly rent.
C)Issued a check for $7,840 to a creditor on account for an invoice of $8,000 less a cash discount of $160.

Accepted Answer

A)Debit Notes Payable and Inte

Question 5

The March bank reconciliation statement for Cab World,Inc. ,showed an NSF check of $300 from J.Brown as well as a bank service charge of $20 for monthly service fees.Select the journal entry required to record these items.

Accepted Answer

A) 
  
B) 
  
C) 
  
D) 
  
A) 
  
B) 
  
C) 
  
D)

Question 6

Identify the procedure below that is

Accepted Answer

A)  Hold all cash received during a month and make one bank deposit at the end of the month. 
B)  Keep cash receipts in a cash register or locked cash drawer or safe. 
C)  Have only designated employees receive and handle cash received by the business. 
D)  Enter cash receipts transactions in the accounting records promptly. 
A)  Hold all cash received during a month and make one bank deposit at the end of the month. 
B)  Keep cash receipts in a cash register or locked cash drawer or safe. 
C)  Have only designated employees receive and handle cash received by the business. 
D)  Enter cash receipts transactions in the accounting records promptly.

Question 7

Bank Reconciliations are not that important because banks never make errors.

Accepted Answer

A) True 
 B)False

Question 8

To arrive at an accurate balance on a bank reconciliation statement,a credit memorandum from the bank for the collection of a note and interest should be

Accepted Answer

A)  added to the bank statement balance. 
B)  added to the book balance. 
C)  deducted from the bank statement balance. 
D)  deducted from the book balance. 
A)  added to the bank statement balance. 
B)  added to the book balance. 
C)  deducted from the bank statement balance. 
D)  deducted from the book balance.

Question 9

A(n)____________________ is a form received from the bank showing all transactions recorded in the depositor's account during the month.

Accepted Answer

The answer of A(n)____________________ is a form received from the...

Question 10

Identify the procedure below that is

Accepted Answer

A)  Enter all cash payments promptly in the accounting records. 
B)  Have only designated personnel approve bills and invoices before they are paid. 
C)  Make all payments out of a petty cash fund or a travel and entertainment fund. 
D)  Use prenumbered check forms. 
A)  Enter all cash payments promptly in the accounting records. 
B)  Have only designated personnel approve bills and invoices before they are paid. 
C)  Make all payments out of a petty cash fund or a travel and entertainment fund. 
D)  Use prenumbered check forms.

Question 11

A strong system of internal control requires that all payments be made by check except those made from a carefully controlled cash fund such as a petty cash fund.

Accepted Answer

A) True 
 B)False

Question 12

If a check written by a firm is not canceled by the bank and returned with the month's bank statement,the firm should

Accepted Answer

A)  consider this check as outstanding when preparing the bank reconciliation. 
B)  immediately notify the bank requesting that it correct its records. 
C)  adjust the balance in the firm's checkbook to reflect the data that appears in the bank's records. 
D)  make no adjustment when preparing the bank reconciliation. 
A)  consider this check as outstanding when preparing the bank reconciliation. 
B)  immediately notify the bank requesting that it correct its records. 
C)  adjust the balance in the firm's checkbook to reflect the data that appears in the bank's records. 
D)  make no adjustment when preparing the bank reconciliation.

Question 13

A firm's bank reconciliation statement shows a book balance of $31,640,an NSF check of $800,and a service charge of $40.Its adjusted book balance is

Accepted Answer

A)  $32,480. 
B)  $30,800. 
C)  $30,880. 
D)  $32,400. 
A)  $32,480. 
B)  $30,800. 
C)  $30,880. 
D)  $32,400.

Question 14

Checks issued by a firm and entered in its records that have not been paid by the bank are called ____________________ checks.

Accepted Answer

The answer of Checks issued by a firm and entered...

Question 15

After a multicolumn special journal such as a cash receipts journal is totaled,it should be proved to be sure that the debits and credits in the journal are equal.

Accepted Answer

A) True 
 B)False

Question 16

To arrive at an accurate balance on a bank reconciliation statement,a service charge should be

Accepted Answer

A)  added to the bank statement balance. 
B)  added to the book balance. 
C)  deducted from the bank statement balance. 
D)  deducted from the book balance. 
A)  added to the bank statement balance. 
B)  added to the book balance. 
C)  deducted from the bank statement balance. 
D)  deducted from the book balance.

Question 17

Amounts that appear in the Other Accounts Credit section of the cash receipts journal require individual posting to the general ledger.

Accepted Answer

A) True 
 B)False

Question 18

Indicate in which section of the Bank Reconciliation Statement the following reconciling items would appear.   A canceled check for $147 erroneously listed on bank statement as $74.

Accepted Answer

A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D 
A)  Option A 
B)  Option B 
C)  Option C 
D)  Option D

Question 19

A firm's bank reconciliation statement shows a book balance of $15,820,an NSF check of $400,and a service charge of $20.Its adjusted book balance is

Accepted Answer

A)  $16,240. 
B)  $15,400. 
C)  $15,440. 
D)  $16,200. 
A)  $16,240. 
B)  $15,400. 
C)  $15,440. 
D)  $16,200.

Question 20

To arrive at an accurate balance on a bank reconciliation statement,a debit memorandum for a customer check marked NSF should be

Accepted Answer

A)  added to the bank statement balance. 
B)  added to the book balance. 
C)  deducted from the bank statement balance. 
D)  deducted from the book balance. 
A)  added to the bank statement balance. 
B)  added to the book balance. 
C)  deducted from the bank statement balance. 
D)  deducted from the book balance.

Exam 9: Cash Receipts, Cash Payments, and Banking Procedures

The entry in a firm's accounting records for a credit customer's check that was returned by the bank marked "NSF" would include

Grouping all transactions involving cash payments together in the cash payments journal strengthens the audit trail.

If the amount of cash available for deposit is ____________________ than the amount listed on the audit tape taken from the cash register,the Cash Short or Over account is debited.

The March bank reconciliation statement for Cab World,Inc. ,showed an NSF check of $300 from J.Brown as well as a bank service charge of $20 for monthly service fees.Select the journal entry required to record these items.

Identify the procedure below that is

Bank Reconciliations are not that important because banks never make errors.

To arrive at an accurate balance on a bank reconciliation statement,a credit memorandum from the bank for the collection of a note and interest should be

A(n)____________________ is a form received from the bank showing all transactions recorded in the depositor's account during the month.

Identify the procedure below that is

A strong system of internal control requires that all payments be made by check except those made from a carefully controlled cash fund such as a petty cash fund.

If a check written by a firm is not canceled by the bank and returned with the month's bank statement,the firm should

A firm's bank reconciliation statement shows a book balance of $31,640,an NSF check of $800,and a service charge of $40.Its adjusted book balance is

Checks issued by a firm and entered in its records that have not been paid by the bank are called ____________________ checks.

After a multicolumn special journal such as a cash receipts journal is totaled,it should be proved to be sure that the debits and credits in the journal are equal.

To arrive at an accurate balance on a bank reconciliation statement,a service charge should be

Amounts that appear in the Other Accounts Credit section of the cash receipts journal require individual posting to the general ledger.

Indicate in which section of the Bank Reconciliation Statement the following reconciling items would appear. A canceled check for $147 erroneously listed on bank statement as $74.

A firm's bank reconciliation statement shows a book balance of $15,820,an NSF check of $400,and a service charge of $20.Its adjusted book balance is

To arrive at an accurate balance on a bank reconciliation statement,a debit memorandum for a customer check marked NSF should be

Accounting: the Language of Business

Analyzing Business Transactions

Analyzing Business Transactions Using T Accounts

The General Journal and the General Ledger

Adjustments and the Worksheet

Closing Entries and the Postclosing Trial Balance

Accounting for Sales and Accounts Receivable

Accounting for Purchases and Accounts Payable

Payroll Computations, Records, and Payment

Payroll Taxes, Deposits, and Reports

Accruals, Deferrals, and the Worksheet

Financial Statements and Closing Procedures

Accounting Principles and Reporting Standards

Accounts Receivable and Uncollectible Accounts

Notes Payable and Notes Receivable

Merchandise Inventory

Property, Plant, and Equipment

Accounting for Partnerships

Corporations: Formation and Capital Stock Transactions

Corporate Earnings and Capital Transactions

Long-Term Bonds

Financial Statement Analyses

The Statement of Cash Flows

Departmentalized Profit and Cost Centers

Accounting for Manufacturing Activities

Job Order Cost Accounting

Process Cost Accounting

Controlling Manufacturing Costs: Standard Costs

Cost-Revenue Analysis for Decision Making

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