Question : 61. Upon completing an aging analysis of accounts receivable, the accountant : 1228523

61. Upon completing an aging analysis of accounts receivable, the accountant for Rosco Works aged the accounts receivable and estimated that $5,000 of the $98,000 accounts receivable balance would be uncollectible. The allowance for doubtful accounts had a $400 debit balance at year-end prior to adjustment. How much is bad debt expense? 
A. $5,000
B. $5,400
C. $4,600
D. $400

62. Which of the following statements does not correctly describe the allowance for doubtful accounts balance? 
A. It is reported on the balance sheet as a component of current assets.
B. It is a contra-asset account.
C. It is reported on the balance sheet as a current liability.
D. It is created as a result of the adjusting entry to record bad debt expense.

63. The Roscoe Company’s March 1, 2010 bank statement balance was $70,000. As of March 1, outstanding checks total $22,000 and deposits in transit total $15,000. How much was Roscoe’s March 1, 2010 cash balance on their books? 
A. $63,000
B. $77,000
C. $70,000
D. $107,000

64. The Tanner Company’s April 1, 2010 pre-reconciliation cash balance on their books was $35,000. While preparing the April 1 bank reconciliation, Tanner determined that outstanding checks total $11,000, deposits in transit total $7,000, and bank service charges are $50. How much was Tanner’s April 1, 2010 cash balance per the bank statement? 
A. $31,000
B. $30,950
C. $38,950
D. $39,000

65. The Conner Company’s August 1, 2010 cash balance on their books was $90,000. As of August 1, outstanding checks total $44,000 and deposits in transit total $30,000. How much was Conner’s August 1, 2010 cash balance on their bank statement? 
A. $76,000
B. $90,000
C. $13,000
D. $104,000

66. Which of the following statements pertaining to bank reconciliations is false? 
A. Outstanding checks are deducted from the bank cash balance.
B. Deposits in transit are added to the bank cash balance.
C. Bank service charges are deducted from the bank cash balance.
D. Non-sufficient funds checks identified in the bank statement are deducted from the book cash balance, not the bank cash balance.

67. When a depositor receives a bank statement indicating that there was a “NSF check”, the depositor should do which of the following? 
A. Reduce the cash account per the books for the amount of the “NSF check”.
B. Reduce the cash account per the bank statement for the amount of the “NSF check”.
C. Credit allowance for doubtful accounts for the amount of the check.
D. Increase the sales returns and allowances account.

68. A deposit in transit on a bank reconciliation should be 
A. added to the depositor’s book cash balance.
B. subtracted from the depositor’s book cash balance.
C. added to the bank statement balance.
D. subtracted from the bank statement balance.

69. Linetech Company’s bank statement showed an ending balance of $8,000. Items appearing in the bank reconciliation included: outstanding checks, $500; deposits in transit, $1,000; bank service charges, $50; and Driver Company’s $250 check erroneously deducted from Linetech’s bank account by the bank. How much is the correct cash balance at the end of the month? 
A. $10,600
B. $8,750
C. $8,500
D. $8,250

70. Which of the following demonstrates a poor internal control procedure? 
A. The bookkeeper makes cash deposits and records journal entries related to cash, while the treasurer prepares the bank reconciliation.
B. The president, who does no bookkeeping, prepares the bank reconciliation each month.
C. The treasurer signs all checks after the bookkeeper prepares the supporting documents.
D. One bookkeeper prepares cash deposits and the other bookkeeper enters the collections in the journal and ledger.