Accounting Ch.6

Outstanding checks:

have not been presented to the bank for payment but have been subtracted in the checkbook.

The May bank statement for Accounting Services shows a balance of $6,200, but the balance per books shows a cash balance of $7,680. Other information includes: 1. A check for $190 to pay the electric bill was recorded on the books as $30; understated. 2. Included on the bank statement was a note collected by the bank for $370 plus interest earned of $30. 3. Checks outstanding totaled $270. 4. Bank service charges were $50. 5. Deposits in transit were $1,880. The adjusted cash balance at the end of May should be:

$7,810.

Construct the bank reconciliation for Milton Company as of July 31, from the following information: Balance per bank statement $9,150 Deposit in transit $705 Checkbook balance $9,250 Outstanding checks $800 NSF check (debit memo) $220 Service charges $115 Interest earned on account $140 What is the Reconciled Balance?

$9,055

Construct the bank reconciliation for Bill's Tutoring, as of October 31, from the following information: Ending checkbook balance $940 Ending bank statement balance $540 Deposits in transit $640 Outstanding checks $280 Bank service charge (debit memo)$40 What is the Reconciled Balance?

$900

The May bank statement for Rental shows a balance of $6,000, but the balance per books shows a cash balance of $8,000. Other information includes: 1. A check for $190 to pay the electric bill was recorded on the books as $10. 2. Included on the bank statement was a note collected by the bank for $450 plus interest of $30. 3. Checks outstanding totaled $270. 4. Bank service charges were $60. 5. Deposits in transit were $2,510. Which item(s) will require a journal entry to update the balance in the Cash account?

Bank service charges, note collected by the bank, and error made by the Bookkeeper

The debit recorded in the journal to establish the petty cash fund is to:

Petty Cash.

A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement?

It is shown as a debit memo.

How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?

They would be subtracted from the balance of the bank statement.

Cash Short and Over is:

a Misc. Expense or Misc. Revenue account depending on the balance in the account.

Calculate, from the following information accumulated by Gene Park, the adjusted cash balance at the end of April. Bank statement ending cash balance $2,710 General ledger cash balance ending $4,350 Bank monthly service charge $50 Deposits in transit $2,700 Outstanding checks $1,300 NSF check returned with bank statement$190

$4,110

Determine the adjusted cash balance per bank for Sheryl's Packaging on November 30, from the following information: Cash balance on the bank statement $3,200 Customer's check returned—NSF $300 Customer's note collected by the bank $600 Deposits in transit, November 30 $1,000 Outstanding checks, November 30 $3,700

$500

The bank statement included bank charges. On the bank reconciliation, this item is:

a deduction from the balance per company books.

An example of electronic funds transfer is:

a transfer of funds without the use of paper checks.

A payment for $27 is incorrectly recorded on the checkbook stub as $72. The $45 error should be shown on the bank reconciliation as:

added to the balance per books.

Bank interest earned on a checking account would be shown on a bank reconciliation as:

added to the balance per books.

On a bank reconciliation, deposits added to the bank side are called:

deposits in transit.

Scotch Services received a credit memorandum from the bank. During the bank reconciliation they should:

increase their cash account on the company's books.

The journal entry to adjust the records from Nothin' But Organization bank reconciliation would include:

notification from the bank of a customer's NSF check.

The bank statement does NOT show:

outstanding checks.

A petty cash fund is set up:

to pay for small expenses.

The credit recorded in the journal to replenish the petty cash fund is to:

Cash.

An error, on the company's books, in recording a $52 deposit as $25 would be included on the bank reconciliation as a(n):

addition to the balance per books.

What type of an account is the petty cash fund?

asset

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

canceled checks.

A $100 petty cash fund has cash of $20 and valid receipts for $40. The entry to replenish the fund would include a:

credit to Cash for $80.

A payment for $51 is incorrectly recorded on the checkbook stub as $15. The $36 error should be shown on the bank reconciliation as:

deducted from the balance per books.

If the owner of Pastel Legal Services forgot to deduct a withdrawal from the balance per books, what entry would be necessary?

Debit Withdrawals; credit Cash

Information to calculate the adjusted cash balance for Chris's Company is as follows: Cash balance per general ledger $1,800 Customer's check returned—NSF $60 Bank service charges $50 Deposits in transit $300 Outstanding checks $600 Customer's note collected by bank $620

$2,310

The May bank statement for Tax Services shows a balance of $5,700, but the balance per books shows a cash balance of $7,200. Other information includes: 1. A check for $200 to pay the electric bill was recorded on the books as $30. 2. Included on the bank statement was a note collected by the bank for $440 plus interest of $20. 3. Checks outstanding totaled $270. 4. Bank service charges were $50. 5. Deposits in transit were $2,010. Which item(s) should be subtracted from the balance per books?

None of the options are correct.

The May bank statement for Consulting Services shows a balance of $7,200, but the balance per books shows a cash balance of $9,100. Other information includes: 1. A check for $170 to pay the electric bill was recorded on the books as $20; understated. 2. Included on the bank statement was a note collected by the bank for $450 plus interest earned of $30. 3. Checks outstanding totaled $290. 4. Bank service charges were $60. 5. Deposits in transit were $2,460. Which item should be added to the company's book balance during the bank reconciliation?

Note collected by the bank