Question : 121.During the month of July, Clanton Industries issued a check : 1258866

 

 

121.During the month of July, Clanton Industries issued a check in the amount of $845 to a supplier on account. The check did not clear the bank during July. In preparing the July 31 bank reconciliation, the company should:   

A.Deduct the check amount from the book balance of cash .

 

B.Add the check amount to the book balance of cash.

 

C.Deduct the check amount from the bank balance.

 

D.Add the check amount to the bank balance.

 

E.Make a journal entry in the company records for an error.

 

 

 

 

122.In the process of reconciling its bank statement for April, Donahue Enterprises’ accountant compiles the following information: 

Cash balance per company books on April 30$6,275

Deposits in transit at month-end$1,300

Outstanding checks at month-end$620

Bank charge for printing new checks$45

Note receivable and interest collected by bank on Donahue’s behalf$770

A check paid to Donahue during the month by a customer is returned by the bank as NSF$480

The adjusted cash balance per the books on April 30 is:    

A.$6,900

 

B.$8,160

 

C.$4,600

 

D.$6,520

 

E.$5,840

 

Book balance$6,275

+ note collection & interest revenue+770

– bank charge for printing new checks-45

– NSF check returned by bank-480

Adjusted book balance$6,520

 

 

 

 

123.In the process of reconciling its bank statement for January, Maxi’s Clothing’s accountant compiles the following information: 

Cash balance per company books on January 30$4,725

Deposits in transit at month-end$1,800

Outstanding checks at month-end$520

Bank service charges$25

EFT automatically paid monthly, not yet recorded by Maxi$380

An NSF check returned on a customer account$265

The adjusted cash balance per the books on January 31 is:    

A.$5,855

 

B.$5,335

 

C.$4,055

 

D.$4,815

 

E.$4,585

 

Book balance$4,725

– bank service charges-25

– EFT-380

– NSF check returned by bank-265

Adjusted book balance$4,055

 

 

 

 

124.Which of the following events would cause a bank to debit a depositor’s account?    

A.The depositor orders new checks through the bank at a cost of $50.

 

B.The bank collects a note receivable and related interest on the depositor’s behalf.

 

C.There are outstanding checks drawn on the account at month-end.

 

D.There are deposits in transit on the account at month-end.

 

E.The bank corrects an error from previous month by adding $75 to the depositor account.

 

 

 

 

125.A seller (or provider) of goods or services to a business organization, usually a manufacturer or wholesaler, is known as a:   

A.Vendor.

 

B.Payee.

 

C.Vendee.

 

D.Creditor.

 

E.Debtor.

 

 

 

 

126.The internal document prepared by a department manager that informs the purchasing department of its merchandise needs and requests that the merchandise be purchased is the   

A.Purchase requisition.

 

B.Purchase order.

 

C.Invoice.

 

D.Receiving report.

 

E.Invoice approval.

 

 

 

 

127.The document that the purchasing department prepares and sends to the vendor to place an order is called the   

A.Purchase requisition.

 

B.Purchase order.

 

C.Invoice.

 

D.Receiving report.

 

E.Invoice approval.

 

 

 

 

128.The itemized statement of goods prepared by a vendor listing the customer’s name, items sold, sales prices, and terms of the sale is called the   

A.Purchase requisition.

 

B.Purchase order.

 

C.Invoice.

 

D.Receiving report.

 

E.Invoice approval.

 

 

 

 

129.The internal document prepared to notify the appropriate persons that goods ordered have been received, describing the quantities and condition of the goods is the   

A.Purchase requisition.

 

B.Purchase order.

 

C.Invoice.

 

D.Receiving report.

 

E.Invoice approval.

 

 

 

 

130.The checklist of steps necessary for approving an invoice for recording and payment, also known as the check authorization, is the   

A.Purchase requisition.

 

B.Purchase order.

 

C.Invoice.

 

D.Receiving report.

 

E.Invoice approval.