17) 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.

 

Which item(s) will require a journal entry to update the balance in the Cash account?

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.

 

18) A payment for $25 is incorrectly recorded on the checkbook stub as $52. The $27 error should be shown on the bank reconciliation as:

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.

 

19) A payment for $31 is incorrectly recorded on the checkbook stub as $13. The $18 error should be shown on the bank reconciliation as:

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.

 

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

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.

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

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.

 

22) If the owner of Que Legal Services forgot to deduct a withdrawal from the balance per books, what entry would be necessary?

A) Debit Cash; credit Withdrawals

B) Debit Withdrawals; credit Cash

C) Debit Revenue; credit Cash

D) Debit cash; credit Revenue

 

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

A) Error made by the bank

B) Outstanding Checks

C) Bank service charges

D) Deposit in transit

 

24) The journal entry to adjust the records from Nothin’ But Organization bank reconciliation would include:

A) the total of outstanding checks.

B) deposits in transit.

C) notification from the bank of a customer’s NSF check.

D) correction of any errors or omissions on the bank statement.

25) 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.

 

26) From the bank reconciliation no entry was recorded for a debit memo for a new check fee expense. This would cause:

A) liabilities to be understated.

B) liabilities to be overstated.

C) expenses to be understated.

D) expenses to be overstated.

 

 

 



Source link

Leave a Reply

Your email address will not be published. Required fields are marked *