Podcast
Questions and Answers
What is the total amount deducted for outstanding checks in the bank's records?
Which entry reflects the note and interest collected by the bank for Power Networking?
What does NSF stand for in banking, as seen in the handling of the returned check?
How does the bank’s collection of a note impact Power Networking's records?
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Which of the following would NOT be considered during the bank reconciliation process?
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What is the adjusted ending balance for Power Networking's records after accounting for the bank service charges and NSF check?
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Which step involves correcting an error recorded in the journal for Check No. 879?
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What does NSF stand for in the context of bank records?
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How much was the note and interest collected by the bank, which needs to be added to Power Networking's records?
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What effect do bank service charges have on the balance of the bank records?
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In reconciling records, what happens during Step 6?
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What is the total amount of outstanding checks listed in the bank's records?
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Which account will be impacted by the journal entry for the NSF check?
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What is the primary purpose of a bank reconciliation?
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Which of the following is NOT an advantage of using bank accounts for internal control?
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What document serves as proof of authority to issue cash payments or electronic transfers?
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In bank reconciliation, what should be done if a deposit does not appear on the bank statement?
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How does an NSF (Non-Sufficient Funds) check impact the bank reconciliation process?
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What is generally included in the journal entries for bank reconciliations?
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What is the function of petty cash management in relation to bank accounts?
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What typically happens to a company's cash account balance after accounting for bank service charges during reconciliation?
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Study Notes
Bank Reconciliation
- A bank reconciliation is an analysis that compares the cash balance reported in the bank statement to the balance of the cash account in the company's ledger.
- The goal is to determine the adjusted cash balance by identifying and explaining differences between the two balances.
Starting Balances
- Power Networking's bank statement shows an ending cash balance of $3,359.78 on July 31.
- The company's cash account balance on July 31 is $2,549.99.
Deposits
- A deposit of $816.20 was not recorded on the bank statement.
Bank Collections
- The bank collected a note for 400andinterestof400 and interest of 400andinterestof8 for Power Networking.
Outstanding Checks
- Three checks written by Power Networking did not appear on the bank statement:
- Check No. 812 for $1,061.00
- Check No. 878 for $435.39
- Check No. 883 for $48.60
NSF Check
- The bank returned a check for $300 from customer Thomas Ivey because of insufficient funds (NSF).
Bank Service Charge and Errors
- The bank charged Power Networking $18 for bank service charges.
- Check No. 879, originally written for 732.26,wasincorrectlyrecordedinthejournalas732.26, was incorrectly recorded in the journal as 732.26,wasincorrectlyrecordedinthejournalas723.26.
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Description
Test your knowledge on bank reconciliation processes by analyzing a bank statement and cash account. You will identify errors, deposits, and outstanding items to determine the adjusted cash balance. This quiz covers essential concepts for understanding financial discrepancies and proper cash management.
