Take Another Quiz

Accounting 201 - Chapter 4

31 Questions
Accounting Quizzes & Trivia

Basic accounting concepts

Questions and Answers
  • 1. 
    • A. 

      Deposits in transit

    • B. 

      Bank service charges

    • C. 

      EFT cash receipts

    • D. 

      Outstanding checks

  • 2. 
    When preparing a bank reconciliation, which of the following items should be added to the book balance?
    • A. 

      EFT receipts

    • B. 

      Deposits in transit

    • C. 

      Collection items

    • D. 

      Both EFT receipts and collection items

  • 3. 
    The checks that have been paid by the bank on behalf of the depositor, which are included with the bank statement, are called:
    • A. 

      Outstanding checks

    • B. 

      Canceled checks

    • C. 

      Checks in transit

    • D. 

      NSF checks

  • 4. 
    Differences between the amount of cash reported on a company’s bank statement and the balance in the company’s Cash account before the bank reconciliation are primarily due to:
    • A. 

      Errors in the accounting process by the company

    • B. 

      Errors made by the bank

    • C. 

      Differences between the cash basis and accrual basis of accounting

    • D. 

      The timing difference in recording transactions

  • 5. 
    Which of the following items will cause a difference between the book balance and the bank balance
    • A. 

      Timing deposits

    • B. 

      Bank collections

    • C. 

      Canceled checks

    • D. 

      Outstanding voided checks

  • 6. 
    A bank charge of $40 for imprinting checks would appear on the bank reconciliation as a(n) __________ to (or from) the _____ balance.
    • A. 

      Addition; bank

    • B. 

      Deduction; bank

    • C. 

      Addition; book

    • D. 

      Deduction; book

  • 7. 
    Herbert Company deposited $25,000 in its bank on the same day as—but after—the bank prepared Herbert Company’s bank statement.  The deposit should appear on the bank reconciliation as a(n) __________ and is called a(n) __________.
    • A. 

      Addition to the bank balance; outstanding deposit

    • B. 

      Addition to the bank balance; deposit in transit

    • C. 

      Deduction to the bank balance; deposit in transit

    • D. 

      Deduction to the bank balance; outstanding deposit

  • 8. 
    Checks written by a company, but not yet paid by the bank, appear on the bank reconciliation as __________       and are called __________.
    • A. 

      Deductions from the bank balance; checks in transit

    • B. 

      Deductions from the bank balance; outstanding checks

    • C. 

      Additions to the bank balance; checks in transit

    • D. 

      Additions to the bank balance; check items

  • 9. 
    In a bank reconciliation, a NSF check is
    • A. 

      Added to the bank balance

    • B. 

      Added to the book balance

    • C. 

      Deducted from the book balance

    • D. 

      Deducted from the bank balance

  • 10. 
    In a bank reconciliation, an EFT cash receipt is
    • A. 

      Added to the bank balance

    • B. 

      Added to the book balance

    • C. 

      Deducted from the book balance

    • D. 

      Deducted from the bank balance

  • 11. 
    In a bank reconciliation, an EFT cash payment is
    • A. 

      Added to the bank balance

    • B. 

      Added to the book balance

    • C. 

      Deducted from the book balance

    • D. 

      Deducted from the bank balance

  • 12. 
    Interest paid by the bank to a company’s account should appear on the bank reconciliation as
    • A. 

      Added to the bank balance

    • B. 

      Added to the book balance

    • C. 

      Deducted from the book balance

    • D. 

      Having no impact on the book balance

  • 13. 
    A bank collected $200 on behalf of its customer.  The $200 should appear on the bank reconciliation as
    • A. 

      Added to the bank balance

    • B. 

      Added to the book balance

    • C. 

      Deducted from the book balance

    • D. 

      Having no impact on the book balance

  • 14. 
    In a bank reconciliation, items recorded by the company, but not yet been recorded by the bank, include
    • A. 

      Interest

    • B. 

      Outstanding checks

    • C. 

      NSF checks

    • D. 

      Bank service charges

  • 15. 
    In a bank reconciliation, items recorded by the bank, but not yet recorded by the company, include
    • A. 

      Deposits in transit

    • B. 

      Bank collections

    • C. 

      Outstanding checks

    • D. 

      Both deposits in transit and outstanding checks

  • 16. 
    The person who prepares the bank reconciliation
    • A. 

      Should also be responsible for cash receipts

    • B. 

      Should also be responsible for cash disbursements

    • C. 

      Should be responsible for both cash receipts and cash disbursements.

    • D. 

      Should have no other cash duties

  • 17. 
    • A. 

      $180 addition to the books

    • B. 

      $180 deduction from the books

    • C. 

      $630 addition to the books

    • D. 

      $630 deduction from the books

  • 18. 
    If the bank records a deposit of $1,500 as $150, the error should be shown on a bank reconciliation as a(n):
    • A. 

      Deduction from the book balance of $1,350

    • B. 

      Deduction from the bank balance of $1,350

    • C. 

      Addition to the bank balance of $1,350

    • D. 

      Addition to the book balance of $1,350

  • 19. 
    There are two records of a business’s cash—the
    • A. 

      Cash account in the general ledger and the petty cash box

    • B. 

      Cash account in the general ledger and the journal entries from the bank reconciliation.

    • C. 

      Bank statement and the cash account in the general ledger

    • D. 

      Bank statement and the cash in petty cash

  • 20. 
    The bank statement showed a NSF check of $300.  In a bank reconciliation, this would be shown as a
    • A. 

      $300 deduction from the bank balance

    • B. 

      $300 addition to the bank balance

    • C. 

      $300 deduction from the book balance.

    • D. 

      $300 addition to the book balance

  • 21. 
    A bank reconciliation included an outstanding check of $1,300 for the purchase of supplies. The journal entry to record this reconciling item
    • A. 

      Should debit Supplies and credit Cash for $1,300

    • B. 

      Should debit Cash and credit Supplies for $1,300

    • C. 

      Should debit Accounts Receivable and credit Cash for $1,300

    • D. 

      Is not required

  • 22. 
    A bank statement included a NSF check from customer Kim Fields for $2,100.  The journal entry to record this reconciling item should
    • A. 

      Debit NSF and credit Cash for $2,100

    • B. 

      Debit Cash and credit Accounts Receivable for $2,100

    • C. 

      Debit Accounts Receivable and credit Cash for $2,100

    • D. 

      Debit Cash and credit NSF for $2,100

  • 23. 
    If a bank statement included a bank collection and related interest revenue, the journal entry to record this reconciling item should include a:
    • A. 

      Debit to Cash

    • B. 

      Credit to Cash

    • C. 

      Debit to Note Receivable

    • D. 

      Debit to Note Payable

  • 24. 
    If a bank reconciliation included deposits in transit amounting to $3,700, the journal entry to record this reconciling item:
    • A. 

      Should debit Deposit in Transit and credit Cash for $3,700

    • B. 

      Should debit Cash and credit Deposit in Transit for $3,700

    • C. 

      Should debit Accounts Receivable and credit Cash for $3,700

    • D. 

      Is not required

  • 25. 
    If a bank statement includes an EFT payment of $945 for insurance, the journal entry to record this reconciling item should include a:
    • A. 

      Debit to Cash for $945

    • B. 

      Debit to Accounts Payable for $945

    • C. 

      Credit to Cash for $945

    • D. 

      Credit to Prepaid Insurance for $945

  • 26. 
    The book side of a bank reconciliation includes
    • A. 

      Deposits in transit, bank collections and NSF checks

    • B. 

      NSF checks, bank collections and interest earned on the checking account

    • C. 

      Outstanding checks and deposits in transit

    • D. 

      Outstanding checks, NSF checks and cost of printed checks.

  • 27. 
    Which of the following would need to be journalized from the bank reconciliation
    • A. 

      All items listed under the bank side

    • B. 

      All items listed on the book side

    • C. 

      All items on the book and bank side

    • D. 

      None of the above

  • 28. 
    Cash Sales from the cash register tapes totaled $882. There is a change fund of $100. The cash count indicates that $984 is in the cash drawer. What journal entry would be required?
    • A. 

      Debit Miscellaneous Expense for $2; credit Cash Short and Over for $2

    • B. 

      Debit Cash for $982, Cash* Short and Over for $2; credit Revenues for $984

    • C. 

      Debit Cash Short and Over for $2; credit Miscellaneous Expense $2

    • D. 

      Debit Cash for $884; credit Revenues for $882, and Cash Short and Over for $2

  • 29. 
    The entry to establish the change fund is: DEBIT                                     CREDIT
    • A. 

      Miscellaneous Expense Cash

    • B. 

      Miscellaneous Expense Change Fund

    • C. 

      Change Fund Cash

    • D. 

      Cash Change Fund

  • 30. 
    A fund with a small amount of cash on hand for minor disbursements is called a
    • A. 

      Petty cash fund.

    • B. 

      Miscellaneous expense fund.

    • C. 

      Slush fund

    • D. 

      Cash fund

  • 31. 
    The entry to establish the petty cash fund is: DEBIT                             CREDIT
    • A. 

      Miscellaneous Expense Cash

    • B. 

      Miscellaneous Expense Petty Cash

    • C. 

      Petty Cash Cash

    • D. 

      Cash Petty Cash