Question : 41. A debit memorandum appeared Mallory’s bank statement for the month : 1224901

41. A debit memorandum appeared on Mallory’s bank statement for the month of May. How will Mallory treat this amount on the May bank reconciliation? 
A. Add it to the company’s balance.
B. Add it to the bank balance.
C. Deduct it from the company’s balance.
D. Deduct it from the bank balance.

42. A credit memorandum appeared on Arthur’s September bank statement. How will Arthur treat this amount on the September bank reconciliation? 
A. Add it to the company’s balance.
B. Add it to the bank balance.
C. Deduct it from the company’s balance.
D. Deduct it from the bank balance.

43. Which of the following is an example of a debit memorandum? 
A. Notice of a bank service charge
B. Notice of interest earned on a checking account
C. Outstanding checks
D. A company’s transposition error in the recording of a deposit

44. Which of the following is an example of a credit memorandum? 
A. Notice of a bank service charge
B. Notice of interest earned on a checking account
C. Outstanding checks
D. A company’s transposition error in the recording of a customer’s check

45. Which of the following procedures is incorrect for establishing and maintaining a petty cash fund? 
A. A check is prepared for a small, fixed amount; when the check is cashed, the money is entrusted to a petty cash custodian.
B. The company must obtain the cash needed for the fund and record an entry for the establishment of the fund.
C. When appropriate documentation is presented, cash payments are made from the fund; the petty cash custodian retains the documentation.
D. When the petty cash fund needs to be replenished, an entry is recorded to recognize an increase in the petty cash account.

46. Which of the following statements is true regarding a credit memorandum and its relationship to a company’s bank reconciliation procedures? 
A. It must be added to the balance per the customer’s records.
B. It is issued to notify a company of bank service charges which need to be recorded on the company’s records.
C. It is issued when a customer gives the company an NSF check which needs to be recorded on the company’s records.
D. It must be recorded as a debit to the balance per the company’s records.

47. If a company erroneously records a $500 deposit as $50 in its records, which of the following must occur when reconciling its bank statement? 
A. The company must increase the balance per its records by $500.
B. The company must increase the balance per its records by $450.
C. The company must decrease the balance per its records by $500.
D. The company must decrease the balance per its records by $450.

48. If a company erroneously records a $50 check received from a customer as $500 in its records, which of the following must occur when reconciling its bank statement? 
A. The company must increase the balance per its records by $500.
B. The company must increase the balance per its records by $450.
C. The company must decrease the balance per its records by $500.
D. The company must decrease the balance per its records by $450.

49. Honey Hut’s unadjusted bank balance is $3,000. Outstanding checks amount to $500 and deposits in transit total $300. Based on this information alone, Honey Hut’s adjusted cash balance is: 
A. $3,200.
B. $3,300.
C. $2,800.
D. $2,700.

50. If the balance on the bank statement does not equal the balance per the company’s records, then it can be assumed that: 
A. The company has no errors in its records concerning the cash account.
B. The bank has made errors in preparing the bank statement.
C. The company has made errors in its records concerning the cash account.
D. There will be items reconciling the difference.