18 Questions
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 deposits credited by the bank but not yet recorded by the company.
What must be deducted from the bank statement balance in preparing a bank reconciliation?
Outstanding checks
What is the purpose of a bank reconciliation?
To account for the differences between the bank statement and general ledger cash balances.
What is the result of a bank reconciliation?
An adjusted cash balance that is higher than the bank statement balance.
What is the purpose of adding deposits in transit to the cash balance per ledger?
To increase the general ledger cash balance.
What is the purpose of deducting outstanding checks from the bank statement balance?
To decrease the bank statement balance.
What is the purpose of a four-column bank reconciliation?
To reconcile cash balances per book and per bank at the beginning and end of the current month, and reconcile cash receipts and cash disbursements of the bank and the depositor during the current month
What would cause the cash balance per ledger to be higher than that reported by the bank?
Outstanding checks
What would require a correcting entry in the depositor's own records?
Error made by the bank
Which of the following would not require an adjusting entry on the depositor's books?
NSF check from customer
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?
Deposits credited by the bank but not yet recorded by the company
What would be the result of a bank error, such as incorrectly charging an amount to the depositor's account?
An adjusting entry would be required on the depositor's books
What is the correct cash balance to be shown in the statement of financial position?
P134,700
What is the unadjusted cash balance per books?
P105,300
What is the amount of payments recorded by Sony before the bank service charge?
P13,250
What is the amount of interest collected by Nitendo Co.?
P1,200
What is the purpose of a bank reconciliation statement?
To ensure the accuracy of the cash balance
What is the effect of deposits in transit on the cash balance?
Increases the cash balance
This quiz covers concepts related to bank reconciliations and cash balances, including identifying errors and adjusting entries. It tests understanding of deposits, outstanding checks, and bank charges. Useful for accounting and finance students.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
