Bank Reconciliations

Question 1

What are outstanding checks?

Answer 1

Checks written and mailed by the company which have not cleared the bank by the bank statement date.

Question 2

List the adjustments made to a bank balance to arrive at book income.

Answer 2

Deposits in Transit;
Cash on Hand (deposited cash receipts, not petty cash);
Outstanding Checks.
Bank Errors

Question 3

What does an NSF check represent?

Answer 3

“Non-sufficient funds” checks received from customers.

Question 4

List the three types of bank reconciliations.

Answer 4

Bank to Book;
Book to Bank;
Bank and Book to True.

Question 5

What does cash on hand reflect?

Answer 5

Petty cash on hand and undeposited cash receipts.

Question 6

What is a deposit in transit?

Answer 6

Deposits made by a company that have not cleared the bank as of the bank statement date.

Question 7

List the adjustments made to book balance to arrive at the bank balance.

Answer 7

Interest Earned;
Note Collected;
Service Charges;
NSF Checks;
Errors in company's records.