Accounting

TEST BANK IN CASH – LEGAL SIZE ACCNTFI MR. ALBNERT C. CHAN, BSC, CPA, MBA 3RD TERM DLS-CSB Ex. 173 The cash balance per books for Dexter Company on September 30, 2008 is $10,740. 93. The following checks and receipts were recorded for the month of October, 2008: ChecksReceipts No. Amount No. Amount Amount Date 17$372. 9622$ 578. 84$843. 8610/ 5 18$780. 6223$1,687. 50$941. 5410/21 19$157. 0024$ 921. 30$808. 5810/27 20$587. 5025$ 246. 03$967. 0010/30 21$234. 15 In addition, the bank statement for the month of October is presented below:

Balance Deposits and CreditsChecks and Debits Balance Last StatementNo. Total AmountNo. Total AmountThis Statement ———————————————————————————————————————— $5,404. 845$9,178. 3610$3,632. 19$10,951. 01 ———————————————————————————————————————— Checks and other debits DepositsDateBalance ——————————————————————— No. AmountNo. AmountNo. Amount ———————————————————————————————————————— 14148. 2917372. 9622578. 845,484. 3810/ 1$9,875. 31 18708. 6224921. 30843. 8610/ 8$9,219. 03 19157. 0025246. 03941. 5410/23$9,541. 58 21234. 1525. 00SC808. 5810/29$10,101. 01 240. 00NSF1,100. 00CM10/31$10,951. 1 ———————————————————————————————————————— Symbols: NSF (Not sufficient funds) SC (Service charge) CM (Credit Memo) ———————————————————————————————————————— Check No. 18 was correctly written for $708. 62 for a payment on account. The NSF check was from S. King, a customer, in settlement of an accounts receivable. An entry had not been made for the NSF check. The credit memo is for the collection of a note receivable including interest of $60 which has not been accrued. The bank service charge is $25. 00. Instructions (a)Prepare a bank reconciliation at October 31. b)Prepare the adjusting journal entries required by the bank reconciliation. MULTIPLE CHOICE 101. Which one of the following would not cause a bank to debit a depositor’s account? a. Bank service charge b. Collection of a note receivable c. Wiring of funds to other locations d. Checks marked NSF 102. A company maintains the asset account, Cash in Bank, on its books, while the bank maintains a reciprocal account which is a. a contra-asset account. b. a liability account. c. also an asset account. d. an owner’s equity account. 103. A remittance advice attached to a company check provides a. etails about the running cash balance in the checking account. b. the magnetic bank routing numbers. c. the explanation of the purpose of the check. d. the signature space for the maker. 104. A deposit made by a company will appear on the bank statement as a a. debit. b. credit. c. debit memorandum. d. credit memorandum. 105. A check returned by the bank marked “NSF” means a. no service fee. b. no signature found. c. not satisfactorily filled-out. d. not sufficient funds. 106. A debit memorandum would not be issued by the bank for a. a bank service charge. b. the issuance of traveler’s checks. c. the wiring of funds. . the collection of a notes receivable. 107. On a bank reconciliation, deposits in transit are a. added to the bank balance. b. deducted from the bank balance. c. added to the book balance. d. deducted from the book balance. 108. A bank reconciliation should be prepared a. whenever the bank refuses to lend the company money. b. when an employee is suspected of fraud. c. to explain any difference between the depositor’s balance per books and the balance per bank. d. by the person who is authorized to sign checks. 109. Deposits in transit a. have been recorded on the company’s books but not yet by the bank. . have been recorded by the bank but not yet by the company. c. have not been recorded by the bank or the company. d. are checks from customers which have not yet been received by the company. 110. In preparing a bank reconciliation, outstanding checks are a. added to the balance per bank. b. deducted from the balance per books. c. added to the balance per books. d. deducted from the balance per bank. 111. If a check correctly written and paid by the bank for $428 is incorrectly recorded on the company’s books for $482, the appropriate treatment on the bank reconciliation would be to a. dd $54 to the bank’s balance. b. add $54 to the book’s balance. c. deduct $54 from the bank’s balance. d. deduct $428 from the book’s balance. 112. Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry: a. Accounts Receivable Cash b. Cash Accounts Receivable c. Miscellaneous Expense Accounts Receivable d. No adjusting entry is necessary. 113. Tolan Company had checks outstanding totaling $5,400 on its June bank reconciliation. In July, Tolan Company issued checks totaling $38,900.

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The July bank statement shows that $24,300 in checks cleared the bank in July. A check from one of Tolan Company’s customers in the amount of $300 was also returned marked “NSF. ” The amount of outstanding checks on Tolan Company’s July bank reconciliation should be a. $14,600. b. $20,000. c. $19,700. d. $9,200. 114. Each of the following items affect the cash balance per books except a. bank service charges. b. notes collected by the bank. c. NSF checks. d. outstanding checks. 115. Grant Company gathered the following reconciling information in preparing its July bank reconciliation:

Cash balance per books, 7/31$5,500 Deposits in transit150 Notes receivable and interest collected by bank850 Bank charge for check printing20 Outstanding checks2,000 NSF check170 The adjusted cash balance per books on July 31 is a. $6,160. b. $6,010. c. $4,310. d. $4,460. 116. Yenn Company developed the following reconciling information in preparing its September bank reconciliation: Cash balance per bank, 9/30$15,000 Note receivable collected by bank6,000 Outstanding checks9,000 Deposits in transit4,500 Bank service charge75 NSF check1,200 Determine the cash balance per books (before adjustments) for Yenn Company. . $11,775. b. $19,500. c. $5,775. d. $15,000. 117. Bank errors a. occur because of time lags. b. must be corrected by debits. c. are infrequent in occurrence. d. are corrected by making an adjusting entry on the depositor’s books. 118. An adjusting entry is not required for a. outstanding checks. b. collection of a note by the bank. c. NSF checks. d. bank service charges. 119. Jones Company had checks outstanding totaling $6,400 on its May bank reconciliation. In June, Jones Company issued checks totaling $39,900. The July bank statement shows that $29,700 in checks cleared the bank in July.

A check from one of Jones Company’s customers in the amount of $300 was also returned marked “NSF. ” The amount of outstanding checks on Jones Company’s July bank reconciliation should be a. $19,600. b. $10,200. c. $16,600. d. $3,800. 120. Wilson Company gathered the following reconciling information in preparing its August bank reconciliation: Cash balance per books, 8/31$7,000 Deposits in transit300 Notes receivable and interest collected by bank1,700 Bank charge for check printing40 Outstanding checks4,000 NSF check340 The adjusted cash balance per books on August 31 is a. $8,320. b. 8,020. c. $4,620. d. $4,920. 121. Jansen Company gathered the following reconciling information in preparing its April bank reconciliation: Cash balance per books, 4/30$6,600 Deposits in transit900 Notes receivable and interest collected by bank2,220 Bank charge for check printing75 Outstanding checks4,500 NSF check420 The adjusted cash balance per books on April 30 is a. $9,225. b. $8,820. c. $8,325. d. $9,165. 122. Barns Company developed the following reconciling information in preparing its September bank reconciliation: Cash balance per bank, 9/30$15,400 Note receivable collected by bank8,400

Outstanding checks12,600 Deposits in transit6,300 Bank service charge105 NSF check1,680 Using the above information, determine the cash balance per books (before adjustments) for the Barns Company. a. $13,685 b. $21,700 c. $2,485 d. $21,000 123. In the month of November, Joles Company Inc. wrote checks in the amount of $9,250. In December, checks in the amount of $12,658 were written. In November, $8,468 of these checks were presented to the bank for payment, and $10,883 were presented in December. What is the amount of outstanding checks at the end of November? a. $1,775 b. $782 c. $2,557 d. $3,550 124.

In the month of November, Joles Company Inc. wrote checks in the amount of $9,250. In December, checks in the amount of $12,658 were written. In November, $8,468 of these checks were presented to the bank for payment, and $10,883 were presented in December. What is the amount of outstanding checks at the end of December? a. $1,775 b. $782 c. $2,557 d. $3,550 125. At April 30, Beckett Company has the following bank information: cash balance per bank $4,600; outstanding checks $280; deposits in transit $550; credit memo for interest $10; bank service charge $20. What is Beckett’s adjusted cash balance on April 30? . $4,860 b. $4,880 c. $4,330 d. $4,870 126. At June 30, Coulsen Company has the following bank information: cash balance per bank $3,600; outstanding checks $280; deposits in transit $550; credit memo for interest $10; bank service charge $20. What is Coulsen’s adjusted cash balance on June 30? a. $3,860 b. $3,880 c. $3,330 d. $3,870 127. Pierce Company wrote checks totaling $8,540 during October and $9,325 during November. $8,120 of these checks cleared the bank in October, and $9,110 cleared the bank in November. What was the amount of outstanding checks on November 30? a. $635 b. $115 c. $305 . $990 128. Rhoden Company wrote checks totaling $17,080 during October and $18,650 during November. $16,240 of these checks cleared the bank in October, and $18,220 cleared the bank in November. What was the amount of outstanding checks on November 30? a. $1,270 b. $230 c. $610 d. $1,980 129. Perkins Company assembled the following information in completing its March bank reconciliation: balance per bank $3,820; outstanding checks $775; deposits in transit $1,250; NSF check $80; bank service charge $25; cash balance per books $4,400. As a result of this reconciliation, Perkins will a. educe its cash account by $475. b. reduce its cash account by $25. c. increase its cash account by $55. d. reduce its cash account by $105. 130. Reisner Company assembled the following information in completing its July bank reconciliation: balance per bank $11,460; outstanding checks $2,325; deposits in transit $3,750; NSF check $240; bank service charge $75; cash balance per books $13,200. As a result of this reconciliation, Reisner will a. reduce its cash account by $1,425. b. reduce its cash account by $75. c. increase its cash account by $165. d. reduce its cash account by $315. END

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