Chat with us, powered by LiveChat A01 Exam 8 (second set) - Writemia

A01 Exam 8 (second set)


Question 1 (5 points)

The drawee is the __________.

Question 1 options:


person   who writes the check


bank that drawer has an account with


the   person to whom the check is payable


the   person who reconciles the account

Question 2 (5 points)

A nonsufficient funds check was returned to your company. How does the bank treat this on your bank statement?

Question 2 options:


It   is added to the bank balance.


It is shown as a debit memo.


It   is shown as a credit memo.


None   of these answers are correct.

Question 3 (5 points)

Which of the following bank reconciliation items would be reflected in a journal entry?

Question 3 options:


error   made by the bank


outstanding   checks


bank service charges


deposit   in transit

Question 4 (5 points)

A restrictive endorsement on a check __________.

Question 4 options:


can   be further endorsed by someone else


is the safest endorsement for businesses


permits   the bank to use its best judgment


None   of these answers are correct.

Question 5 (5 points)

The bank statement shows __________.

Question 5 options:


the   beginning bank balance of the cash at the start of the month


the   checks the bank has paid and any deposits received


any   other charges or additions to the bank balance


All of these answers are correct.

Question 6 (5 points)

From the bank reconciliation no entry was recorded for deposits in transit. This would cause __________.

Question 6 options:


assets   to be overstated


assets   to be understated


no impact since deposits in transit are already included in   the balance per books


no   impact since deposits are not recorded on the books

Question 7 (5 points)

Endorsing a check __________.

Question 7 options:


guarantees   payment


transfers the right to deposit or transfer cash


cancels   the transaction


All   of these answers are correct.

Question 8 (5 points)

Which item(s. will require a journal entry to update the balance in the Cash account?

Question 8 options:


checks   outstanding and deposits in transit


bank   service charges, note collected by the bank, and deposits in transit


bank service charges, note collected by the bank, and error   made by Accounting Services


None   of these answers are correct.

Question 9 (5 points)

Determine the adjusted cash balance per bank for Santa’s Packaging on November 30, from the following information.


Cash balance on the bank statement



Customer’s check returnedNSF



Customer’s note collected by the   bank



Deposits in transit, November 30



Outstanding checks, November 30


Question 9 options:









Question 10 (5 points)

How would outstanding checks be handled when reconciling the ending cash balance per the bank statement to the correct adjusted cash balance?

Question 10 options:


They   would be added to the balance of the bank statement.


They would be subtracted from the balance of the bank statement.


They   would be added to the balance per books.


They   would be ignored.

Question 11 (5 points)

If the written amount on the check does not match the amount expressed in figures, the bank may __________.

Question 11 options:


pay   the amount written in words


return the check unpaid


contact   the drawer to see what was meant


All   of these answers are correct.

Question 12 (5 points)

The check is written and signed by the __________.

Question 12 options:









Question 13 (5 points)

Advantages of on-line banking include __________.

Question 13 options:




transaction   speed




All of the above answers are correct.

Question 14 (5 points)

Which item should be added to the company’s book balance during the bank reconciliation?

Question 14 options:


deposit   in transit


check   outstanding


bank   service charge


note collected by the bank

Question 15 (5 points)

Calculate, from the following information the adjusted cash balance at the end of April.


Bank statement ending cash balance



General ledger cash balance ending



Bank monthly service charge



Deposits in transit



Outstanding checks



NSF check returned with bank   statement


Question 15 options:









Question 16 (5 points)

Scotch Services received a credit memorandum from the bank. During the bank reconciliation they should __________.

Question 16 options:


increase their cash account on the company’s books


decrease   their cash account on the company’s books


increase   the ending cash balance on the bank statement


decrease   the ending cash balance on the bank statement

Question 17 (5 points)

On a bank reconciliation, deposits added to the bank side are called __________.

Question 17 options:


deposits in transit


late   deposits


deposits   on hold


outstanding   deposits

Question 18 (5 points)

Company policy for internal control should include all of the following EXCEPT for what?

Question 18 options:


Employees   will be rotated.


Monthly bank statements should be sent to and reconciled by   the same employees who authorize payments and write checks.


The   owner (or responsible employee. signs all checks after receiving   authorization to pay from the departments concerned.


At   time of payment, all supporting invoices or documents will be stamped   "paid."

Question 19 (5 points)

The bank statement included bank charges. On the bank reconciliation, the item is __________.

Question 19 options:


an   addition to the balance per company books


an   addition to the balance per bank statement


a   deduction from the balance per bank statement


a deduction from the balance per company books

Question 20 (5 points)

A full endorsement on a check __________.

Question 20 options:


is   the same as a blank endorsement


can be endorsed only by the person or   company named in the original endorsement


is   the safest endorsement for businesses


does   none of the above

Do you need an answer to this or any other questions?

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