A01 Online Exam 8_11 SCORE 100 Percent
Question 1 of 205.0 Points
Outstanding checks __________.
A. have been subtracted on the bank records but not the checkbook records
B. have not been presented to the bank for payment and have not been subtracted from the checkbook
C. have not been presented to the bank for payment but have been subtracted in the checkbook
D. have been returned to the business for non-payment
Question 2 of 205.0 Points
Internal control over a company’s assets should include which of the following?
A. Responsibilities and duties of employees will be divided.
B. All cash receipts will be deposited into the bank the same day they arrive.
C. All cash payments will be made by check (except petty cash..
D. All of these answers are correct.
Question 3 of 205.0 Points
The bank statement shows __________.
A. the beginning bank balance of the cash at the start of the month
B. the checks the bank has paid and any deposits received
C. any other charges or additions to the bank balance
D. All of these answers are correct.
Question 4 of 205.0 Points
From the bank reconciliation no entry was recorded for deposits in transit. This would cause __________.
A. assets to be overstated
B. assets to be understated
C. no impact since deposits in transit are already included in the balance per books
D. no impact since deposits are not recorded on the books
Question 5 of 205.0 Points
Scotch Services received a credit memorandum from the bank. During the bank reconciliation they should __________.
A. increase their cash account on the company’s books
B. decrease their cash account on the company’s books
C. increase the ending cash balance on the bank statement
D. decrease the ending cash balance on the bank statement
Question 6 of 205.0 Points
The journal entry to reverse the entry of a customer’s nonsufficient funds check would include a __________.
A. debit to Cash
B. credit to Cash
C. debit to Accounts Payable
D. credit to Accounts Receivable
Question 7 of 205.0 Points
Advantages of on-line banking include __________.
A. convenience
B. transaction speed
C. effectiveness
D. All of the above answers are correct.
Question 8 of 205.0 Points
The bank statement included bank charges. On the bank reconciliation, the item is __________.
A. an addition to the balance per company books
B. an addition to the balance per bank statement
C. a deduction from the balance per bank statement
D. a deduction from the balance per company books
Question 9 of 205.0 Points
The bank charged another company’s check against our account, this would be included on the bank reconciliation as a(n. __________.
A. addition to the balance per books
B. subtraction from the balance per books
C. addition to the balance per bank
D. subtraction from the balance per bank
Question 10 of 205.0 Points
A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement?
A. It is added to the bank balance.
B. It is shown as a debit memo.
C. It is shown as a credit memo.
D. None of these answers are correct.
Question 11 of 205.0 Points
Determine the adjusted cash balance per bank for Santa’s Packaging on November 30, from the following information.
Cash balance on the bank statement
$2,350
Customer’s check returnedNSF
500
Customer’s note collected by the bank
600
Deposits in transit, November 30
1,400
Outstanding checks, November 30
2,650
A. $1,250
B. $1,100
C. $1,550
D. $1,350
Question 12 of 205.0 Points
Which item should be added to the company’s book balance during the bank reconciliation?
A. deposit in transit
B. check outstanding
C. bank service charge
D. note collected by the bank
Question 13 of 205.0 Points
An example of an internal control is __________.
A. the use of a bank account
B. the use of pre-numbered checks
C. the use of checks with reference source documents
D. All of these answers are correct.
Question 14 of 205.0 Points
Calculate, from the following information the adjusted cash balance at the end of April.
Bank statement ending cash balance
$2,000
General ledger cash balance ending
3,250
Bank monthly service charge
45
Deposits in transit
2,500
Outstanding checks
1,500
NSF check returned with bank statement
205
A. $3,000
B. $4,250
C. $4,000
D. $5,500
Question 15 of 205.0 Points
How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?
A. They would be added to the balance of the bank statement.
B. They would be subtracted from the balance of the bank statement.
C. They would be added to the balance per books.
D. They would be ignored.
Question 16 of 205.0 Points
Which item(s. will require a journal entry to update the balance in the Cash account?
A. checks outstanding and deposits in transit
B. bank service charges, note collected by the bank, and deposits in transit
C. bank service charges, note collected by the bank, and error made by Accounting Services
D. None of these answers are correct.
Question 17 of 205.0 Points
A restrictive endorsement on a check __________.
A. can be further endorsed by someone else
B. is the safest endorsement for businesses
C. permits the bank to use its best judgment
D. None of these answers are correct.
Question 18 of 205.0 Points
Which of the following bank reconciliation items would be reflected in a journal entry?
A. error made by the bank
B. outstanding checks
C. bank service charges
D. deposit in transit
Question 19 of 205.0 Points
Endorsing a check __________.
A. guarantees payment
B. transfers the right to deposit or transfer cash
C. cancels the transaction
D. All of these answers are correct.
Question 20 of 205.0 Points
Company policy for internal control should include all of the following EXCEPT for what?
A. Employees will be rotated.
B. Monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks.
C. The owner (or responsible employee. signs all checks after receiving authorization to pay from the departments concerned.
D. At time of payment, all supporting invoices or documents will be stamped “paid.”
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