financial accounting chapter 4

In a bank reconciliation, which of the following will require a journal entry by the company?

Adjustments to the balance per books for items discovered on the bank reconciliation that were not yet recorded on the books

When adjusting the company's cash account balance in a bank reconciliation, which items reduce the company's cash account balance

Charges for NSF checks Service charges

When adjusting the company's cash account balance in a bank reconciliation, which item must be added to the cash account balance?

Collections of funds by the bank

Effective internal control over cash requires segregation of duties. Which of the following duties should be segregated?

Depositing checks into the bank and recording receipts in the accounting records Opening the mail and deposit of checks in the bank

When adjusting the bank balance in a bank reconciliation, which item must be added to the bank balance?

Deposits outstanding

Which of the following items will require a journal entry following a bank reconciliation?

Notes collected by the bank NSF checks

Which of the following steps are necessary to reconcile the bank balance and the cash account balance.

Record items that reconcile the company's cash balance Adjust bank's cash balance for items not in bank statement Adjust the company's cash balance for items not in company records

Which of the following are errors in accounting for cash?

Recording a cash collection of $4,000 but depositing $3,000 into the bank. Recording a check for $168 for $186 in the cash account. The bank processing a check for $210 as $120.

When adjusting the company's cash account balance in a bank reconciliation, which items reduce the company's cash account balanc

Service charges Charges for NSF checks

What would cause a bank statement not to agree with the cash balance in the accounting records?

The company made an error in recording a deposit. Deposits outstanding that have been recorded on the company's records, but not on the banks. The bank paid interest that the company has not recorded. The bank made an error in recording a deposit made by the company.

List the steps for a bank reconciliation in the correct order. (Drag the items to put them in the proper order with the first step on top.)

adjust bank cash balance adjust company cash balance update companys cash account

paying by check helps a business to control cash when the

check is signed by an authorized manager checks are prenumbered and written sequentially

Internal control procedures for cash disbursements (other than small disbursements from petty cash) should include that (Select all that apply.)

checks are signed by authorized individuals. all expenditures are authorized. all disbursements are made by check, debit card, or credit card.

Cash disbursements that have been recorded in the company's accounting records but are not yet recorded by the bank are called

checks outstanding

The bank will show a customer's deposit on bank statements as a

credit bc cash is a liability for the banki

The bank will show a customer's withdrawal as a

debit

Lindell sells $100 of goods to a customer. The customer pays with a personal check. Recording this transaction will include a

debit to Cash.

Cash receipts that have been recorded in the company's accounting records but are not yet recorded by the bank are

deposits outstanding

is a mistake in accounting, which can be intentional or unintentional

error

True or false: The entry for a sale to customers is different depending on whether the customer pays with cash or a check.

false

what are common controls over cash receipts?

opening mail daily and making a detailed list of checks received having two different employees take custody of the checks and make the deposit

When adjusting the bank balance in a bank reconciliation, which item must be subtracted from the bank balance?

outstanding checks

One of the most important internal controls for cash is the bank _____________.

reconciliation

A bank reconciliation is a procedure used to determine if the cash balance in the bank statement equals ____________________.

the ending balance of cash in the accounting records.

bank statement may not agree with the amount of cash recorded by the company in the cash account because of _______________________ differences and errors.

timing

A non-sufficient funds check requiring an adjustment to the cash balance was written:

to the company preparing the bank reconciliation