Question : Learning Objective 4-1 1) Comparing a company’s cash balance in its : 1253203

Learning Objective 4-1

1) Comparing a company’s cash balance in its accounting records with the bank statement is called ________.

A) a bank reconciliation

B) an external audit

C) an internal audit

D) adjusting the books

2) Preparing a bank reconciliation enables a company to ________.

A) locate any errors, whether made by the bank or by the company

B) make adjustments for transactions that have already been recorded in the accounting records

C) make adjustments in the cash accounts

D) update the bank statements

3) A common item on the bank reconciliation is ________.

A) outstanding checks, which are added to the balance per bank statement

B) outstanding checks, which are added to the balance per books

C) deposits in transit, which are added to the balance per bank statement

D) deposits in transit, which are added to the balance per books

4) Which of the following is NOT correct when preparing a bank reconciliation?

A) Outstanding checks are added to the balance per books.

B) Deposits in transit are added to the balance per bank statement.

C) Bank service charges are deducted from the balance per books.

D) NSF checks are deducted from the balance per books.

5) Team Shirts made a deposit of $150 on March 31 to its account at First Bank. The deposit did not appear on the March bank statement. On its bank reconciliation, Team Shirts should ________.

A) add $150 to the Team Shirts’ balance per books

B) subtract $150 from the Team Shirts’ balance per books

C) add $150 to the balance per bank statement

D) subtract $150 from the balance per bank statement

6) Team Shirts deposited a check written for $325. However, the accountant entered the amount as $235 into the books. On the bank statement the amount deposited was correctly entered as $325. On the bank reconciliation, the $90 should be ________.

A) added to the balance per books

B) deducted from the balance per books

C) added to the balance per bank statement

D) deducted from the balance per bank statement

7) The March bank statement for Jem’s Jewelers showed an NSF check for $125. On the bank reconciliation, the amount of the check should be ________.

A) added to the balance per books

B) deducted from the balance per books

C) added to the balance per bank statement

D) deducted from the balance per bank statement

8) The August bank statement for Midway Company showed that the bank had collected a $5,000 note receivable for the company. Midway Company has not recorded the collection. On the bank reconciliation, the $5,000 should be ________.

A) added to the balance per books

B) deducted from the balance per books

C) added to the balance per bank statement

D) deducted from the balance per bank statement

9) The accountant found that four outstanding checks worth a total of $990 were not on the bank statement. On the bank reconciliation, this amount should be ________.

A) added to the balance per books

B) deducted from the balance per books

C) added to the balance per bank statement

D) deducted from the balance per bank statement

10) Which of the following items from Kash Kow’s bank reconciliation requires an adjusting entry on Kash Kow’s books?

A) deposits in transit

B) outstanding checks

C) bank service charges

D) an error made by the bank on the bank statement