Question 1 (5 points)

The drawee is the __________.

Question 1 options:

person   who writes the check

bank that drawer has an account with

the   person to whom the check is payable

the   person who reconciles the account

Question 2 (5 points)

A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement?

Question 2 options:

It   is added to the bank balance.

It is shown as a debit memo.

It   is shown as a credit memo.

None   of these answers are correct.

Question 3 (5 points)

Which of the following bank reconciliation items would be reflected in a journal entry?

Question 3 options:

error   made by the bank

outstanding   checks

bank service charges

deposit   in transit

Question 4 (5 points)

A restrictive endorsement on a check __________.

Question 4 options:

can   be further endorsed by someone else

is the safest endorsement for businesses

permits   the bank to use its best judgment

None   of these answers are correct.

Question 5 (5 points)

The bank statement shows __________.

Question 5 options:

the   beginning bank balance of the cash at the start of the month

the   checks the bank has paid and any deposits received

any   other charges or additions to the bank balance

All of these answers are correct.

Question 6 (5 points)

From the bank reconciliation no entry was recorded for deposits in transit. This would cause __________.

Question 6 options:

assets   to be overstated

assets   to be understated

no impact since deposits in transit are already included in   the balance per books

no   impact since deposits are not recorded on the books

Question 7 (5 points)

Endorsing a check __________.

Question 7 options:

guarantees   payment

transfers the right to deposit or transfer cash

cancels   the transaction

All   of these answers are correct.

Question 8 (5 points)

Which item(s. will require a journal entry to update the balance in the Cash account?

Question 8 options:

checks   outstanding and deposits in transit

bank   service charges, note collected by the bank, and deposits in transit

bank service charges, note collected by the bank, and error   made by Accounting Services

None   of these answers are correct.

Question 9 (5 points)

Determine the adjusted cash balance per bank for Santa’s Packaging on November 30, from the following information.

Cash balance on the bank statement

$2,350

Customer’s check returnedNSF

500

Customer’s note collected by the   bank

600

Deposits in transit, November 30

1,400

Outstanding checks, November 30

2,650

Question 9 options:

$1,250

$1,100

$1,550

$1,350

Question 10 (5 points)

How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?

Question 10 options:

They   would be added to the balance of the bank statement.

They would be subtracted from the balance of the bank statement.

They   would be added to the balance per books.

They   would be ignored.

Question 11 (5 points)

If the written amount on the check does not match the amount expressed in figures, the bank may __________.

Question 11 options:

pay   the amount written in words

return the check unpaid

contact   the drawer to see what was meant

All   of these answers are correct.

Question 12 (5 points)

The check is written and signed by the __________.

Question 12 options:

drawer

drawee

payee

payer

Question 13 (5 points)

Advantages of on-line banking include __________.

Question 13 options:

convenience

transaction   speed

effectiveness

All of the above answers are correct.

Question 14 (5 points)

Which item should be added to the company’s book balance during the bank reconciliation?

Question 14 options:

deposit   in transit

check   outstanding

bank   service charge

note collected by the bank

Question 15 (5 points)

Calculate, from the following information the adjusted cash balance at the end of April.

Bank statement ending cash balance

$2,000

General ledger cash balance ending

3,250

Bank monthly service charge

45

Deposits in transit

2,500

Outstanding checks

1,500

NSF check returned with bank   statement

205

Question 15 options:

$3,000

$4,250

$4,000

$5,500

Question 16 (5 points)

Scotch Services received a credit memorandum from the bank. During the bank reconciliation they should __________.

Question 16 options:

increase their cash account on the company’s books

decrease   their cash account on the company’s books

increase   the ending cash balance on the bank statement

decrease   the ending cash balance on the bank statement

Question 17 (5 points)

On a bank reconciliation, deposits added to the bank side are called __________.

Question 17 options:

deposits in transit

late   deposits

deposits   on hold

outstanding   deposits

Question 18 (5 points)

Company policy for internal control should include all of the following EXCEPT for what?

Question 18 options:

Employees   will be rotated.

Monthly bank statements should be sent to and reconciled by   the same employees who authorize payments and write checks.

The   owner (or responsible employee. signs all checks after receiving   authorization to pay from the departments concerned.

At   time of payment, all supporting invoices or documents will be stamped   "paid."

Question 19 (5 points)

The bank statement included bank charges. On the bank reconciliation, the item is __________.

Question 19 options:

an   addition to the balance per company books

an   addition to the balance per bank statement

a   deduction from the balance per bank statement

a deduction from the balance per company books

Question 20 (5 points)

A full endorsement on a check __________.

Question 20 options:

is   the same as a blank endorsement

can be endorsed only by the person or   company named in the original endorsement

is   the safest endorsement for businesses

does   none of the above