Bank Reconciliation
NOTE: For multiple-choice and true/false questions, simply place your cursor over what you think is the correct answer. (There is no need to click the answer.) For fill-in-the-blank questions place your cursor over the _________.
If you have any difficulty answering the questions, learn more about this topic by reading our mini-lectures covering introductory to Bank Reconciliation.
| 1. | Checks that have been written by a company but have not yet been charged to the company's checking account are referred to as ____________________ checks. |
| 2. | A company's receipts from September 30 that get deposited to the company's bank account on October 1st are referred to as deposits ___ _______________ as of September 30. |
| 3. | A general guide for reconciling the bank statement is "Put it where it _______". |
NOTE: For questions 4-15 place your cursor in the middle of the white cell that indicates the proper action for preparing a bank statement reconciliation.
| Add To BOOK Balance |
Deduct From BOOK Balance |
Add To BANK Balance |
Deduct From BANK Balance | ||
| 4. | Outstanding checks. | Wrong. | Wrong. | Wrong. | Right! |
| 5. | Bank service charge. | Wrong. | Right! | Wrong. | Wrong. |
| 6. | Interest credited to bank account. | Right! | Wrong. | Wrong. | Wrong. |
| 7. | Interest charged to bank account. | Wrong. | Right! | Wrong. | Wrong. |
| 8. | Deposit in transit. | Wrong. | Wrong. | Right! | Wrong. |
| 9. | Bank inadvertently charged your bank account for another company's bank fees. | Wrong. | Wrong. | Right! | Wrong. |
| 10. | Bank erred by posting another company's credit memo to your company's bank account. | Wrong. | Wrong. | Wrong. | Right! |
| 11. | Fee charged by bank for returned check. | Wrong. | Right! | Wrong. | Wrong. |
| Add To BOOK Balance |
Deduct From BOOK Balance |
Add To BANK Balance |
Deduct From BANK Balance | ||
| 12. | A company wrote a check for $76 and it cleared the bank for $76. However, the company recorded the check in its Cash account as $67. How is the difference of $9 handled on the bank reconciliation? | Wrong. | Right! | Wrong. | Wrong. |
| 13. | A company had a receipt of $989 and correctly prepared its bank deposit slip for $989. However, the company recorded the receipt in its Cash account as $998. How is the difference of $9 handled on the bank reconciliation? | Wrong. | Right! | Wrong. | Wrong. |
| 14. | The bank collected a Note Receivable for the company and credited the company's bank account for $1,000. | Right! | Wrong. | Wrong. | Wrong. |
| 15. | A company deposited a check from a customer into its checking account. A few days later the check was returned with the notation account closed and the bank deducted the amount on the bank statement. | Wrong. | Right! | Wrong. | Wrong. |
| 16. | A company's Cash account has a balance of $851 as of October 31. The bank statement for this account reports a balance of $1,430 as of October 31. There are outstanding checks totaling $840 and a deposit in transit of $60. The bank statement shows interest earned of $19, service charges of $30, a customer's returned check of $100, and a check printing fee of $90. What is the reconciled Cash balance that should be reported on the company's balance sheet as of October 31? |
| Answer | |
| 17. | Which of the following items will require a journal entry to the company's books? |
| Bank service charge Deposit in transit Bank error | |
| 18. | Which of the following will NOT require a journal entry to the company's books? |
|
Check printing charge Outstanding checks Fee for NSF check | |
| 19. | A company recorded its check #2754 in its accounting records as $98. However, check #2754 was actually written for $89 and it cleared the bank as $89. What adjustment is needed to the Cash balance per books? |
| Decrease by $9 Increase by $9 None needed | |
| 20. | A company recorded its August 15 receipts on its books as $165. However, the receipts were actually $156. The deposit slip for the bank was prepared correctly as $156. What adjustment is needed to the Cash balance per books? |
| Decrease by $9 Increase by $9 None needed | |
If you have any difficulty answering the questions, learn more about this topic by reading our mini-lectures covering introductory to Bank Reconciliation.
