Chapter 2: Bank Reconciliation

Question 1

What are the 3 kinds of Bank Deposits

Answer 1

1. Demand Deposit
2. Savings Deposit
3. Time Deposits

Question 2

Is the current account or checking account where deposits are covered by deposits slips and funds are withdrawable on demand by drawing checks against the bank. Is usually a noninterest bearing.

Answer 2

Demand Deposit

Question 3

The depositor is given a passbook upon the initial deposit. It is interest bearing

Answer 3

Saving Deposit

Question 4

Is evidenced, however by a formal agreement embodied in an instrument called “certificate of deposit”.

Answer 4

Time Deposit

Question 5

Is a statement which brings into agreement the cash balance per book and cash balance per bank.

Answer 5

Bank Reconciliation

Question 6

Is a monthly report of the bank to the depositor

Answer 6

Bank Statement

Question 7

Are the checks issued by the depositor and paid by the bank during the month.

Answer 7

Canceled Checks

Question 8

What are the book reconciling items?

Answer 8

a.) Credit Memos
b.) Debit Memos
c.) Errors

Question 9

What are the bank reconciling items?

Answer 9

a.) Deposits in Transit
b.) Outstanding Checks
c.) Errors

Question 10

Refers to items not representing deposits credited by the bank to the account of the depositor but not yet recoreded by the depositor as cash receipts.

Answer 10

Credit memos

Question 11

Refers to items not representing checks paid by the bank which are charged or debited to the account of the depositor but not yet recoreded by the depositor as cash disbursements.

Answer 11

Debit Memos

Question 12

Are checks deposited but returned by the bank because of insufficicency of fund.

Answer 12

NSF

Question 13

Are checks deposited but returned by the bank because of technical defects such as absence of signature or countersignature, etc…

Answer 13

Technically defective checks

Question 14

Include bank charges for interest, collection, checkbook and penalty

Answer 14

Bank Service Charges

Question 15

are collections already recorded by the depositor as cash receipts but not yet reflected on the bank statement.

Answer 15

Deposits in Transit

Question 16

Are checks already recorded by the depositor as cash disbursements but not yet reflected on the bank statement.

Answer 16

Outstanding checks

Question 17

Forms of Bank Reconciliation

Answer 17

1.) Adjusted Balance Method
2.) Book to bank Method
3.) Bank to book Method