(C3) PROOF OF CASH

Question 1

TRUE OR FALSE. The bank reconciliation is so called “two date” because it literally involves two dates.

Answer 1

TRUE

Question 2

TRUE OR FALSE. The procedures followed for a one date reconciliation are different for a two-date reconciliation.

Answer 2

FALSE. It applies the same.

Question 3

TRUE OR FALSE. A two-date reconciliation becomes complicated only when certain facts or data are omitted, hence the necessity for computing them.

Answer 3

TRUE

Question 4

What are the four possible information which may be omitted in a two-date bank reconciliation?

Answer 4

1. Book Balance - Beg. & End.
2. Bank Balance - Beg. & End.
3. DITs - Beg. & End.
4. OCs - Beg. & End.

Question 5

TRUE OR FALSE. The omitted information in computing the two-date bank reconciliation may only be one or a combination.

Answer 5

TRUE

Question 6

YES OR NO. Should you use the given formulas if the ending balances are not given?

Answer 6

YES

Question 7

TRUE OR FALSE. In computing the beginning balances which are omitted, The same formula used for the acquisition of ending balances must be used.

Answer 7

FALSE. The same formula will be used but it should be reversed or just work back.

Question 8

What is the formula for the computation of book balance?

Answer 8

BALANCE PER BOOK - BEG.
Add: Book Debits
Total
Less: Book Credits
BALANCE PER BOOK - END.

Question 9

These refer to cash receipts or all items debited to the cash in bank account.

Answer 9

Book Debits

Question 10

These refer to cash disbursements or all items credited to the cash in bank account.

Answer 10

Book Credits

Question 11

What is the formula for the computation of bank balance?

Answer 11

BALANCE PER BANK - BEG.
Add: Bank Credits
Total
Less: Bank Debits
BALANCE PER BANK - END.

Question 12

These refer to all items credited to the account of the depositor which include deposits of knowledge by bank and credit memos.

Answer 12

Bank Credits

Question 13

These refer to all items debited to the account of the depositor which include checks paid by bank and debit memos.

Answer 13

Bank Debits

Question 14

What is the formula for the computation of deposits in transit?

Answer 14

DEPOSITS IN TRANSIT - BEG.
Add: Cash Receipts Deposited
Total
Less: Deposits Acknowledged By Bank
DEPOSITS IN TRANSIT - END.

Question 15

What is the formula for the computation of outstanding checks?

Answer 15

OUTSTANDING CHECKS - BEG.
Add: Checks Drawn By Depositor
Total:
Less: Checks Paid By Bank
OUTSTANDING CHECKS - END.

Question 16

It is an expanded reconciliation in that it includes proof of receipts and disbursements.

Answer 16

Proof of Cash

Question 17

TRUE OR FALSE. Preparing a proof of cash is useful in discovering possible discrepancies in handling cash particularly when cash receipts have been recorded but have not been deposited.

Answer 17

TRUE

Question 18

What are the three forms of proof of cash?

Answer 18

1. Adjusted Balance Method
2. Book to Bank Method
3. Bank to Book Method

Question 19

TRUE OR FALSE. Only the book to bank method requires a four column worksheet.

Answer 19

FALSE. In all the three forms, a four-column worksheet is necessary.

Question 20

TRUE OR FALSE. Under the adjusted balance method, an eight column worksheet may be required.

Answer 20

TRUE