Account Reconciliations And Journal Entry Quiz
This quiz is used to provide a knowledge check on the Account Reconciliation and Journal Entry training.
Questions and Answers
- 1.
What is the main purpose of an account reconciliation?
- A.
They show the monthly movement of the account.
- B.
They allow one to review the account quickly.
- C.
Validate account balances.
- D.
They are required as part of the month end close process and appear on the close checklist.
Correct Answer
C. Validate account balances.Explanation
The main purpose of an account reconciliation is to validate account balances. This process involves comparing the account balance in the general ledger to the balance in the corresponding bank statement or other external records. By reconciling the account, discrepancies or errors can be identified and resolved, ensuring that the account balance is accurate and reliable.Rate this question:
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- 2.
If the account reconciliations have not been fully reviewed, but it is a quarter end month and a Certification Letter is required, how should you proceed?
- A.
Have a verbal conversation with your Manager about the issue then sign the certification letter with no disclosure.
- B.
Refuse to sign the certification letter until all accounts have been reviewed, regardless of Management's request.
- C.
Sign the certification letter with a disclosure noting which reconciliations have not been reviewed.
Correct Answer
C. Sign the certification letter with a disclosure noting which reconciliations have not been reviewed.Explanation
In this situation, it is important to be transparent and honest about the status of the account reconciliations. By signing the certification letter with a disclosure noting which reconciliations have not been reviewed, you are providing accurate information to management and stakeholders. This allows them to make informed decisions based on the incomplete review. It is not advisable to sign the certification letter with no disclosure, as this would be misleading. Refusing to sign the certification letter until all accounts have been reviewed may cause delays and may not be feasible within the given time frame of a quarter end month.Rate this question:
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- 3.
What does it mean to sign a certification letter?
- A.
You have reviewed all accounts and have validated the balances.
- B.
Required process by US law so you are required to sign the certification letter.
- C.
You have completed the close process.
Correct Answer
A. You have reviewed all accounts and have validated the balances.Explanation
Signing a certification letter means that you have carefully examined all accounts and verified the accuracy of the balances. It indicates that you have thoroughly reviewed the financial information and are confident in its correctness. This is an important step in ensuring compliance with US law and demonstrating your responsibility in the close process.Rate this question:
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- 4.
An account reconciliation should, at a minimum, include which of the following items?
- A.
Account name and number
- B.
Ending Balance
- C.
Reviewer’s signature & date
- D.
Preparer’s signature & date
- E.
All of the above
Correct Answer
E. All of the aboveExplanation
An account reconciliation should include all of the above items because they are essential for ensuring accuracy and completeness. The account name and number help to identify the specific account being reconciled. The ending balance is necessary to compare with the bank statement or other records to identify any discrepancies. The reviewer's and preparer's signatures and dates provide evidence of accountability and the completion of the reconciliation process. Including all of these items ensures a thorough and reliable account reconciliation.Rate this question:
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- 5.
All accounts must be reconciled and reviewed/approved on a(n) _________________, at a minimum.
- A.
Annual basis
- B.
Monthly basis
- C.
Weekly basis
- D.
Quarterly basis
Correct Answer
D. Quarterly basisExplanation
All accounts must be reconciled and reviewed/approved on a quarterly basis, at a minimum. This means that the reconciliation and review/approval process should occur at least once every three months. This allows for regular monitoring and assessment of the accounts to ensure accuracy and identify any discrepancies or errors in a timely manner. Reconciling and reviewing accounts on a quarterly basis helps to maintain financial integrity and ensure that the company's financial records are up to date and accurate.Rate this question:
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- 6.
When must non standard journal entries be approved?
- A.
One week prior to entry.
- B.
Prior to the signing of the certification letter.
- C.
One hour prior to entry.
Correct Answer
B. Prior to the signing of the certification letter.Explanation
Non-standard journal entries must be approved prior to the signing of the certification letter. This means that any entries that deviate from the standard or regular journal entries must be reviewed and authorized before the certification letter, which confirms the accuracy and completeness of the financial statements, is signed. This ensures that any non-standard entries are properly evaluated and authorized before they are included in the financial records.Rate this question:
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- 7.
Standard Journal Entries are:
- A.
Infrequent
- B.
Non-recurring
- C.
Unusual in nature
- D.
All of the above
- E.
None of the above
Correct Answer
E. None of the aboveExplanation
Standard journal entries are not infrequent, non-recurring, or unusual in nature. They are routine and repetitive entries that are made regularly in a company's accounting system. These entries are used to record recurring transactions such as monthly rent, depreciation, or salary expenses. Therefore, the correct answer is "None of the above."Rate this question:
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- 8.
All accounts with a balance need to be reconciled?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
This statement is true because reconciling accounts with a balance is an important step in ensuring the accuracy and integrity of financial records. Reconciliation involves comparing the balances recorded in the company's books with the balances shown on bank statements or other external records. This process helps to identify any discrepancies or errors and allows for any necessary adjustments to be made. By reconciling all accounts with a balance, businesses can maintain accurate financial information and have a clear understanding of their financial position.Rate this question:
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- 9.
An account reconciliation can include Third Party (Non-GL) support?
- A.
True
- B.
False
Correct Answer
A. TrueExplanation
An account reconciliation can include Third Party (Non-GL) support because it is common for businesses to have transactions with external parties that need to be reconciled. These transactions may not be recorded in the general ledger (GL) but still need to be included in the reconciliation process to ensure accuracy and completeness. Including Third Party (Non-GL) support in the reconciliation helps identify any discrepancies or errors in the financial records and allows for a more comprehensive reconciliation of the account.Rate this question:
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- 10.
Not having evidence of approval on a journal entry is ok so long as the entry was prepared prior to the certification letter?
- A.
True
- B.
False
Correct Answer
B. FalseExplanation
Not having evidence of approval on a journal entry is not okay, even if the entry was prepared prior to the certification letter. Evidence of approval is necessary to ensure that the journal entry has been reviewed and authorized by the appropriate personnel. Without evidence of approval, there is a risk of unauthorized or fraudulent entries being recorded in the financial records. Therefore, the statement is false.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
ProProfs Editorial Team -
Apr 07, 2010Quiz Created by
Cameron IA
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