INTAC - CHAPTER 2 Flashcards
A bank reconciliation is
a. A financial statement that lists all of the bank account balances of an entity.
b. A merger of two banks that previously were competitors.
c. A statement sent by the bank to depositor on a monthly basis.
d. A schedule that accounts for the differences between cash balance shown on the bank statement and the cash balance shown on the general ledger.
d. A schedule that accounts for the differences between cash balance shown on the bank statement and the cash balance shown on the general ledger.
Which of the following items must be added to the cash balance per ledger in preparing a bank reconciliation which ends with adjusted cash balance?
a. Note receivable collected by bank in favor of the depositor and credited to the account of the depositor
b. NSF customer check
c. Service charge
d. Erroneous bank debit
a. Note receivable collected by bank in favor of the depositor and credited to the account of the depositor
Which of the following would be added to the balance per bank statement to arrive at the correct cash balance?
a. Outstanding check
b. Bank service charge
c. Deposit in transit
d. A customer note collected by the bank on behalf of the depositor
c. Deposit in transit
Which of the following must be deducted from the bank statement balance in preparing a bank reconciliation which ends with adjusted cash balance?
a. Deposit in transit
b. Outstanding check
c. Reduction of loan charged to the account of the depositor
d. Certified check
b. Outstanding check
If the balance shown in the bank statement is less than the correct cash balance and neither the entity nor the bank has made any errors, there must be
a. Deposits credited by the bank but not yet recorded by the depositor
b. Outstanding checks
c. Deposits in transit
d. Bank charges not yet recorded by the depositor
d. Bank charges not yet recorded by the depositor
If the cash balance shown in the accounting record is less than the correct cash balance and neither the entity nor the bank has made any errors, there must be
a. Deposits credited by the bank but not yet recorded by the depositor
b. Deposits in transit
c. Outstanding checks
d. Bank charges not yet recorded by the depositor
a. Deposits credited by the bank but not yet recorded by the depositor
Bank reconciliations are normally prepared on a monthly basis to identify adjustments needed in the depositor’s records and to identify bank errors. Adjustments on the part of the depositor should be recorded for
a. Bank errors, outstanding checks and deposits in transit.
b. All items except bank errors, outstanding checks and deposits in transit.
c. Book errors, bank errors, deposits in transit and outstanding checks.
d. Outstanding checks and deposits in transit.
d. Outstanding checks and deposits in transit.
Bank statements provide information about all of the following, except
a. Checks cleared during the period
b. NSF checks
c. Bank charges for the period
d. Errors made by the depositor
d. Errors made by the depositor
Which of the following statements in relation to a certified check is not true?
a. A certified check is a liability of the bank certifying it.
b. A certified check will be accepted by many persons who would not otherwise accept a personal check.
c. A certified check is one drawn by a bank upon itself.
d. A certified check should not be included in the outstanding checks.
c. A certified check is one drawn by a bank upon itself.
Which of the following statements in relation to bank reconciliation is true?
a. Bank service charge will cause the cash balance per ledger to be higher than that reported by the bank, all other things being equal.
b. Credit memos will cause the cash balance per ledger to be higher than that reported by the bank, all other things being equal.
c. Outstanding checks will cause the cash balance per ledger to be greater than the balance reported by the bank, all other things being equal.
d. The cash amount reported in the statement of financial position must be the balance reported in the bank statement.
a. Bank service charge will cause the cash balance per ledger to be higher than that reported by the bank, all other things being equal.
