The journal entry to reverse the entry of a customer’s nonsufficient

Quiz 8

 

A blank endorsement on a check __________.

  A. can be further endorsed by someone else     

  B. cannot be further endorsed by someone else           

  C. is the safest type of endorsement        

  D. permits only the original endorser to get the money           

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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  

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The first two numbers of the ABA code listed on the check represent __________.

  A. the Federal Reserve District     

  B. the check number          

  C. the routing number       

  D. the account number      

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The check is written and signed by the __________.

  A. drawer    

  B. drawee    

  C. payee       

  D. payer       

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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     

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A bank service charge 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          

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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       

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The drawee is the __________.

  A. person who writes the check   

  B. bank that drawer has an account with            

  C. the person to whom the check is payable       

  D. the person who reconciles the account          

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If the written amount on the check does not match the amount expressed in figures, the bank may __________.

  A. pay the amount written in words        

  B. return the check unpaid           

  C. contact the drawer to see what was meant    

  D. All of these answers are correct.         

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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.         

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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.    

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Advantages of on-line banking include __________.

  A. convenience       

  B. transaction speed          

  C. effectiveness       

  D. All of the above answers are correct.

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Checks that have been processed by the bank and are no longer negotiable are __________.

  A. outstanding checks        

  B. canceled checks

  C. checks in process           

  D. blank checks       

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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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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    

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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   

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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   

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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          

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A full endorsement on a check __________.

  A. is the same as a blank endorsement   

  B. can be endorsed only by the person or company named in the original endorsement   

  C. is the safest endorsement for businesses       

  D. does none of the above            

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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.         

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