Chapter 9 quiz

For which of the following reconciling items would a company prepare a journal entry after completing the bank reconciliation statement?

NSF check

Upon collection of the amount due on an interest-bearing promissory note from a customer, the accountant would debit Cash, credit Notes Receivable, and:

credit Interest Income.

The entry to replenish a petty cash fund includes a:

debits to various expense accounts and a credit to Cash.

The safest form of endorsement of a check for business purposes is:

the restrictive endorsement.

A firm's bank reconciliation shows a book balance of $9,200, a deposit in transit of $920, an NSF check of $560, outstanding checks totaling $3,100, and a service charge of $50. Its adjusted book balance

$8,590 (The adjusted book balance would be computed as follows: book balance of $9,200 less NSF check of $560 less service charge of $50 = $8,590.)

If a check written by a firm is not canceled by the bank and returned with the month's bank statement, the firm should:

consider this check as outstanding when preparing the bank reconciliation.

A check issued for $540 to pay a vendor on account was recorded in the firm's records as $450; the canceled check was properly listed on the bank statement at $540. To arrive at an accurate balance on a bank reconciliation statement, the error should be:

deducted from the book balance.

All of the following are essential cash payment internal controls except:

Ensuring that the person who records cash payments should be the one who both approves payments and writes the checks.

Which account will be credited when a promissory note is used to replace an accounts receivable balance?

Accounts Receivable

What type of account is Petty Cash?

Asset