Chapter 07 – Internal Control and Cash
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LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
79. Accompanying the bank statement was a debit memo for bank service charges. On the bank reconciliation, the item is
a.
a deduction from the balance per company’s records
b.
an addition to the balance per bank statement
c.
a deduction from the balance per bank statement
d.
an addition to the balance per company’s records
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
80. Accompanying the bank statement was a debit memo for bank service charges. What entry is required in the
company’s accounts?
a.
debit Miscellaneous Expense; credit Cash
b.
debit Cash; credit Other Income
c.
debit Cash; credit Accounts Payable
d.
debit Accounts Payable; credit Cash
ANSWER:
a
POINTS:
1
DIFFICULTY:
Easy
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
81. A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. This item would
be included in the bank reconciliation as a(n)
Chapter 07 – Internal Control and Cash
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Page 32
a.
b.
c.
d.
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
82. A check drawn by a company in payment of a voucher for $965 was recorded in the journal as $695. What entry is
required in the company’s accounts?
a.
debit Accounts Payable; credit Cash
b.
debit Cash; credit Accounts Receivable
c.
debit Cash; credit Accounts Payable
d.
debit Accounts Receivable; credit Cash
ANSWER:
a
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Remembering
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
83. Receipts from cash sales of $3,200 were recorded incorrectly in the cash receipts journal as $2,300. This item would
be included on the bank reconciliation as a(n)
a.
deduction from the balance per company’s records
b.
addition to the balance per bank statement
c.
deduction from the balance per bank statement
d.
addition to the balance per company’s records
ANSWER:
d
POINTS:
1
DIFFICULTY:
Moderate
Chapter 07 – Internal Control and Cash
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Page 39
d.
$36,500
ANSWER:
d
RATIONALE:
Amount of outstanding checks on the May bank reconciliation = Outstanding checks
appearing on the April bank reconciliation + Checks issued in May – Checks cleared
in May = $19,200 + $64,900 – $47,600 = $36,500
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
99. Rodgers Company gathered the following reconciling information in preparing its May bank reconciliation. Calculate
the adjusted cash balance per books on May 31.
Cash balance per books, 5/31
$5,400
Deposits in transit
375
Notes receivable and interest collected by bank
650
Bank charge for check printing
40
Outstanding checks
2,400
NSF check
140
a.
$5,870
b.
$6,245
c.
$4,930
d.
$3,845
ANSWER:
a
RATIONALE:
Adjusted cash balance per books on May 31 = Cash balance per books on May 31 +
Notes receivable and interest collected by bank – Bank charge for check printing –
NSF check = $5,400 + $650 – $40 – $140 = $5,870
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
100. Gunnar Company gathered the following reconciling information in preparing its September bank reconciliation.
Chapter 07 – Internal Control and Cash
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Page 40
Calculate the adjusted cash balance per books on September 30.
Cash balance per books, 9/30
$2,750
Deposits in transit
200
Notes receivable and interest collected by bank
630
Bank charge for check printing
50
Outstanding checks
1,250
NSF check
290
a.
$5,130
b.
$3,690
c.
$3,040
d.
$1,590
ANSWER:
c
RATIONALE:
Adjusted cash balance per books on September 30 = Cash balance per books on
September 30 + Notes receivable and interest collected by bank – Bank charge for
check printing – NSF check = $2,750 + $630 – $50 – $290 = $3,040
POINTS:
1
DIFFICULTY:
Moderate
Bloom’s: Applying
QUESTION TYPE:
Multiple Choice
HAS VARIABLES:
False
LEARNING OBJECTIVES:
FNMN.WAJO.19.07-05 – LO: 07–05
ACCREDITING STANDARDS:
ACCT.ACBSP.APC.11 – Bank Reconciliation
ACCT.AICPA.FN.03 – Measurement
BUSPROG: Analytic
DATE CREATED:
7/22/2017 6:21 PM
DATE MODIFIED:
10/16/2017 5:17 PM
101. Jamison Company gathered the following reconciling information in preparing its June bank reconciliation:
Cash balance per bank, 6/30
$13,000
Note receivable collected by bank
4,000
Outstanding checks
7,000
Deposits in transit
2,500
Bank service charge
35
NSF check
1,900
Using the above information, determine the cash balance per books (before adjustments) for Jamison Company.
a.
$8,065
b.
$10,565
c.
$15,065
d.
$6,435
ANSWER:
d
RATIONALE:
Adjusted balance = Cash balance per bank on June 30 + Deposits in transit –
Outstanding checks = $13,000 + $2,500 – $7,000 = $8,500
Cash balance per books (before adjustment) = Adjusted balance + NSF checks + Bank
service charge – Note receivable collected by bank = $8,500 + $1,900 + $35 – $4,000