How is a businesss certified check treated in doing the


1.

Effective internal controls for cash include:

o making cash payments by prenumbered check.

o depositing cash in the bank on a timely basis.

o giving written cash receipts to customers as evidence of payment.

o all of these.

2.

Which of the following is not a procedure for the control of cash receipts?

o Immediate preparation of records of all cash receipts.

o Giving customers written receipts for all monies paid.

o Using prenumbered checks.

o Depositing cash in the bank frequently.

3.

Which of the following is not a procedure for control of cash payments?

o Checks should be properly authorized with approval signatures.

o The business should provide written receipts to all cash customers.

o All checks should be prenumbered.

o Spoiled checks should be voided and retained.

4.

Which of the following is not a feature of an internal control system?

o Separation of duties so that fraud or theft requires collusion

o Establishing clear lines of authority and responsibility

o Using unnumbered receipts and purchase orders

o Implementing physical controls such as locking cash in a safe

5.

In a company's bank reconciliation, an outstanding check is a check that:

o is guaranteed for payment by the bank.

o has been issued by the company but has not been presented to the bank for payment.

o has been presented to the bank for payment but has not been reported on the bank statement.

o has been written for an amount that is greater than the balance in the account holder's bank account.

6.

The most favorable opinion that an auditor can express is the

o Unqualified opinion.

o Qualified opinion.

o Adverse opinion.

o Disclaimer.

7.

The most negative opinion that an auditor can express is the 09_19_2014_QC_54289

o Unqualified opinion.

o Qualified opinion.

o Adverse opinion.

o Disclaimer.

8.

A financial statement audit is

o a detailed examination of a company's financial statements.

o tests the reliability of the accounting system used to produce the financial statements.

o conducted by an independent auditor.

o all of these.

9.

How is a business's certified check treated in doing the business's bank reconciliation?

o It is added to the bank balance.

o It is subtracted from the book balance.

o It is subtracted from the bank balance.

o It is not included in doing the bank reconciliation.

10.

When a customer's NSF check is returned to a business with its bank statement, the business should make a journal entry increasing

o Cash.

o Accounts Receivable.

o A net loss.

o Expense for Bad Debts.

11.

What documentation issued by a bank decreases the balance in a company's checking account balance at the bank?

o a credit memos

o credit entries

o a debit memo

o NSF checks

12.

What documentation issued by a bank increases a company's checking account balance at the bank?

o an account invoice

o a debit memo

o a credit memo

o a certified check

13.

In preparing bank reconciliations, typical adjustments to the bank balance include

o NSF checks.

o interest earned on the account.

o accounts or notes receivable collected by the bank.

o deposits in transit.

14.

In preparing bank reconciliations, typical adjustments to the book balance include

o outstanding checks.

o correction of an error made by the bank.

o interest earned on the checking account.

o deposits in transit.

15.

Osborn Company's unadjusted book balance at June 30, 2014 is $12,200. The company's bank statement reveals bank service charges of $61. Two credit memos are included in the bank statement: one for $1,464 which represents a collection of an account receivable that the bank made for Osborn and one for $20 which represents the amount of interest that Osborn had earned on its interest-bearing checking account in June. Based on this information, Osborn's true cash balance is:

o $13,684.

o $13,745.

o $12,200.

o $13,623.

16.

Davis Company's unadjusted bank balance at March 31, 2014 is $4,620. The bank reconciliation revealed outstanding checks amounting to $680 and deposits in transit of $490. Based on this information, Davis's true cash balance is:

o $5,110.

o $4,620.

o $4,430.

o $4,130.

17.

Rich Company's unadjusted book balance at October 31, 2014 is $5,950. The following information is available for the bank reconciliation.

Outstanding checks, $1,450

Deposits in transit, $1,250

Bank service charges, $110

Bank collected an accounts receivable for Rich Company, $2,700

NSF check written by one of Rich's customers, $1,450

Based on this information Rich's true cash balance is:

o $7,710.

o $7,090.

o $2,700.

o $5,640.

18.

The bank statement for Trainum Company contained the following items: a bank service charge of $30; a credit memo for interest earned, $35; and a $90 NSF check from one of Trainum customers. Outstanding checks amounted to $200 ; a deposit in transit was $500.

Assuming that the unadjusted bank balance was $1,000, determine the unadjusted book balance.

o $1,385.

o $1,500.

o $915.

o $1,300.

19.

At the end of the month, Grant Entertainment Company showed a $10,500 book balance in its cash account. The following information was gathered by studying the bank statement and the company's cash records:

(1) deposits in transit amounted to $3,450

(2) outstanding checks were $6,800

(3) a $610 check had been incorrectly drawn on Grant's account by the bank

(4) NSF checks returned by the bank were $810

(5) bank service charge was $30

(6) credit memo for $75 for the collection of one of the company's account receivable

Based on the above information the true cash balance would be:

o $10,345.

o $7,050.

o $6,945.

o $9,735.

20.

At March 31, Casey Co. had a book balance in its cash account of $10,500. At the end of March the company determined that it had outstanding checks of $1,130, deposits in transit of $700, a bank service charge of $40, and an NSF check from a customer for $225. The true cash balance at March 31 is:

o $10,235.

o $10,500.

o $9,780.

o $10,070.

21.

The April 30, 2014 bank statement for Turner Corporation shows an ending balance of $36,308. The unadjusted cash account balance was $30,150. The accountant for Turner gathered the following information:

1. April's deposit in transit was $4,612

2. The bank statement reports a service charge of $84

3. A credit memo included in the bank statement shows interest earned of $335

4. Outstanding checks totaled $11,889

5. The bank statement included a customer's $1,370 NSF check deposited in April

What is the true cash balance as of April 30, 2014?

o $33,643

o $33,308

o $29,031

o $27,661

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