Chapter 6

The reconciliation of the cash balance per the company records to the adjusted cash balance.

A bank reconciliation sometimes points to the need for adjusting entries. In general, the source of the adjustments is:

The Reconciliation of the cash balance per the company records to the adjusted cash balance.

A bank reconciliation sometimes points to the need of adjusting entries. In general, that source of the adjustments is:

The proceeds of a note collected by the bank are deposited to the account.

A credit memorandum accompanying a bank statement wold occur for which of the following items?

All of the Above -NSF Checks -Outstanding Checks -Deposits in Transit

Which of the following cause differences between bank statements and a company's books (accounting records)?

Outstanding Checks

Which of the following items would be subtracted from the balance per bank statement in adjusting to the correct adjusted cash balance?

False

Companies may legally use the "float", even to the extent of writing checks when no money is in an account.

A debit to Unrealized Loss on Trading Securities

During its first year of operation, Lenton Company acquired three investments in trading securities. Investment A cost $50,000 and had a year-end market value of $60,000. Investment B cost $35,000 and had a year-end market value of $17,000. Investment C cost $26,000 and had a year-end market value of $24,000. The journal entry to record the decline in market value would include:

10,000$

During its first year of operation, Lenton Company acquired three investments in trading securities. Investment A cost $50,000 and had a year-end market value of $60,000. Investment B cost $35,000 and had a year-end market value of $17,000. Investment C cost $26,000 and had a year-end market value of $24,000. What amount should be reported as a charge against income in Lenton's income statement for the first year of operation?

Ending balance per company records

Monthly bank service charges are subtracted in the reconciliation of a certain amount to the correct adjusted cash balance. What is the "amount" in question?

False

Only decreases in value are recognized for trading securities.

None of the above -Cash -Petty Cash -Revenues

When using a petty cash system, the replenishment of the fund would normally include a debit to:

Reported on the balance sheet as a current asset

Short-term investments owned by a company are:

Correct

The Cash Account is listed on the balance sheet in the current asset section and all cash items are normally combined and reported as a single figure

Travel Advances to employees

The Cash account on the balance sheet should not include which of the following items:

Travel advances to employees

The Cash account on the balance sheet should not include which of the following items?

True

The Items reported in the Cash account on the balance sheet must be acceptable to the bank for deposit and free from restrictions for use in satisfying current debts.

petty cash receipts

The Original amount of petty cash fund should be equal to the cash remaining in the fund plus:

reported on the balance sheet as a current asset

The Trading securities owned by a company are:

False

The accounting department should have exclusive control over the functions of cash collection, bank deposits, recording appropriate journal entries and preparing the periodic bank reconciliation.

Correct

The initial recording of the trading securities is at cost, Including brokerage fees.

True

The reconciliation of the cash balance per company records to the correct adjusted cash balance would indicate the need for journal entries.

Cash

The replenishment of petty cash fund involves a credit to which of the following accounts?

Added to the balance per the bank statement

When reconciling the ending cash balance per the bank statenebt to the correct adjusted cash balance, how would deposits in transit be handled?