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Questions and Answers
What must be the case if the balance shown on a company's bank statement is less than the correct cash balance and neither the company nor the bank has made any errors?
What must be the case if the balance shown on a company's bank statement is less than the correct cash balance and neither the company nor the bank has made any errors?
- There are outstanding checks that have not been deducted.
- The company has made an error in recording deposits.
- There are deposits credited by the bank but not yet recorded by the company. (correct)
- The bank has charged the company's account with a loan reduction.
What must be deducted from the bank statement balance in preparing a bank reconciliation?
What must be deducted from the bank statement balance in preparing a bank reconciliation?
- Deposits in transit
- Outstanding checks (correct)
- Certified checks
- NSF customer checks
What is the purpose of a bank reconciliation?
What is the purpose of a bank reconciliation?
- To account for the differences between the bank statement and general ledger cash balances. (correct)
- To prepare a formal financial statement listing all bank account balances.
- To send a monthly statement to the depositor.
- To merge two banks that were previously competitors.
What is the result of a bank reconciliation?
What is the result of a bank reconciliation?
What is the purpose of adding deposits in transit to the cash balance per ledger?
What is the purpose of adding deposits in transit to the cash balance per ledger?
What is the purpose of deducting outstanding checks from the bank statement balance?
What is the purpose of deducting outstanding checks from the bank statement balance?
What is the purpose of a four-column bank reconciliation?
What is the purpose of a four-column bank reconciliation?
What would cause the cash balance per ledger to be higher than that reported by the bank?
What would cause the cash balance per ledger to be higher than that reported by the bank?
What would require a correcting entry in the depositor's own records?
What would require a correcting entry in the depositor's own records?
Which of the following would not require an adjusting entry on the depositor's books?
Which of the following would not require an adjusting entry on the depositor's books?
If the cash balance shown on a company's accounting records is less than the correct cash balance and neither the company nor the bank has made any errors, what could be the reason?
If the cash balance shown on a company's accounting records is less than the correct cash balance and neither the company nor the bank has made any errors, what could be the reason?
What would be the result of a bank error, such as incorrectly charging an amount to the depositor's account?
What would be the result of a bank error, such as incorrectly charging an amount to the depositor's account?
What is the correct cash balance to be shown in the statement of financial position?
What is the correct cash balance to be shown in the statement of financial position?
What is the unadjusted cash balance per books?
What is the unadjusted cash balance per books?
What is the amount of payments recorded by Sony before the bank service charge?
What is the amount of payments recorded by Sony before the bank service charge?
What is the amount of interest collected by Nitendo Co.?
What is the amount of interest collected by Nitendo Co.?
What is the purpose of a bank reconciliation statement?
What is the purpose of a bank reconciliation statement?
What is the effect of deposits in transit on the cash balance?
What is the effect of deposits in transit on the cash balance?
