FAR — Financial Accounting & Reporting — Quiz 31

Questions in this quiz (10)

1. Which of the following is deducted from the company's book balance during bank reconciliation?

   • Deposits in transit
   • Outstanding checks
   • Bank service charges
   • Bank errors in the company's favor

2. Which item would increase the company's book balance during reconciliation?

   • NSF checks
   • Bank service charges
   • Interest earned by the bank
   • Outstanding checks

3. Which of the following best describes an NSF check?

   • A check recorded but not yet cleared
   • A check returned due to insufficient funds
   • A check deposited late
   • A check issued after the reporting period

4. Which internal control is most effective in protecting cash?

   • Segregation of duties
   • Matching principle
   • Revenue recognition
   • Periodicity assumption

5. Which of the following is a strong control over cash receipts?

   • Monthly deposits
   • Depositing receipts daily
   • Allowing one employee to handle cash
   • Eliminating documentation

6. Which procedure compares company cash records with bank records?

   • Internal audit
   • Bank reconciliation
   • Cash budgeting
   • Authorization review

7. Which account is credited when recording bank service charges?

   • Cash
   • Bank expense
   • Revenue
   • Accounts receivable

8. Which account is debited when an NSF check is returned?

   • Cash
   • Accounts receivable
   • Revenue
   • Expense

9. Which item appears in company records but not yet on the bank statement?

   • Outstanding checks
   • Bank service charges
   • Bank collections
   • Interest earned

10. Which item appears on the bank statement but not yet in company records?

    • Deposits in transit
    • Bank collections
    • Outstanding checks
    • Prepaid expenses