(C3) PROOF OF CASH Flashcards
TRUE OR FALSE. The bank reconciliation is so called “two date” because it literally involves two dates.
TRUE
TRUE OR FALSE. The procedures followed for a one date reconciliation are different for a two-date reconciliation.
FALSE. It applies the same.
TRUE OR FALSE. A two-date reconciliation becomes complicated only when certain facts or data are omitted, hence the necessity for computing them.
TRUE
What are the four possible information which may be omitted in a two-date bank reconciliation?
- Book Balance - Beg. & End.
- Bank Balance - Beg. & End.
- DITs - Beg. & End.
- OCs - Beg. & End.
TRUE OR FALSE. The omitted information in computing the two-date bank reconciliation may only be one or a combination.
TRUE
YES OR NO. Should you use the given formulas if the ending balances are not given?
YES
TRUE OR FALSE. In computing the beginning balances which are omitted, The same formula used for the acquisition of ending balances must be used.
FALSE. The same formula will be used but it should be reversed or just work back.
What is the formula for the computation of book balance?
BALANCE PER BOOK - BEG.
Add: Book Debits
Total
Less: Book Credits
BALANCE PER BOOK - END.
These refer to cash receipts or all items debited to the cash in bank account.
Book Debits
These refer to cash disbursements or all items credited to the cash in bank account.
Book Credits
What is the formula for the computation of bank balance?
BALANCE PER BANK - BEG.
Add: Bank Credits
Total
Less: Bank Debits
BALANCE PER BANK - END.
These refer to all items credited to the account of the depositor which include deposits of knowledge by bank and credit memos.
Bank Credits
These refer to all items debited to the account of the depositor which include checks paid by bank and debit memos.
Bank Debits
What is the formula for the computation of deposits in transit?
DEPOSITS IN TRANSIT - BEG.
Add: Cash Receipts Deposited
Total
Less: Deposits Acknowledged By Bank
DEPOSITS IN TRANSIT - END.
What is the formula for the computation of outstanding checks?
OUTSTANDING CHECKS - BEG.
Add: Checks Drawn By Depositor
Total:
Less: Checks Paid By Bank
OUTSTANDING CHECKS - END.
It is an expanded reconciliation in that it includes proof of receipts and disbursements.
Proof of Cash
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.
TRUE
What are the three forms of proof of cash?
- Adjusted Balance Method
- Book to Bank Method
- Bank to Book Method
TRUE OR FALSE. Only the book to bank method requires a four column worksheet.
FALSE. In all the three forms, a four-column worksheet is necessary.
TRUE OR FALSE. Under the adjusted balance method, an eight column worksheet may be required.
TRUE
