Chapter 7

Question 1

When are debit memos put on put on a bank statement? Give an example of a debit memo.

Answer 1

An example of a debit memo is an NSF cheque. The amount from an NSF cheque - or any other debit memo is put on the bank statement when the cash is withdrawn from the bank account.

Question 2

When are credit memos put on the bank statement? Give an example of a credit memo.

Answer 2

Credit memos are put on the bank statement when cash is deposited into the bank account. An example of a credit memos are ETF funds.

Question 3

What are some items included on the ledger but not on the bank statement? Give an example.

Answer 3

Deposits in transit are not on the bank statement. (For example a cheque that a company has not cashed yet or cash that has not been put in the bank yet.)

Question 4

What is the difference between a deposit in transit and an outstanding cheque?

Answer 4

A deposit in transit is money that you have but have not deposited yet, an outstanding cheque is money that someone else has not cashed yet.

Question 5

What are some items that will be recorded on the bank statement, but not the le