Chapter 9 Quiz

Which of the following statements is correct?

To record a cash purchase of merchandise, the accountant would debit Purchases and credit Cash

To arrive at an accurate balance on a bank reconciliation statement, deposits in transit should be

added to the bank statement balance

The most appropriate form of endorsement of a check for business purposes is

the restrictive endorsement

A check issued for $890 to pay a vendor on account was recorded in the firm's records as $980; the canceled check was properly listed on the bank statement at $890. To arrive at an accurate balance on a bank reconciliation statement, the error should be

added to the book balance

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

debits to various expense accounts and a credit to Cash

To arrive at an accurate balance on a bank reconciliation, outstanding checks should be

deducted from the bank statement balance

To arrive at an accurate balance on a bank reconciliation, an error made by the bank in which the bank deducted a check issued by another business from the balance of the company's bank account should be

deducted from the book balance

A firm's bank reconciliation statement shows a book balance of $31,640, an NSF check of $400, and a service charge of $40. Its adjusted book balance is

$31,200

Which of the following would not be shown as an adjustment to the book balance on a bank reconciliation?

deposits in transit