Question

1. On a bank reconciliation, an unrecorded debit memorandum for printing checks is:
A. Noted as a memorandum only.
B. Added to the book balance of cash.
C. Deducted from the book balance of cash.
D. Added to the bank balance of cash.
E. Deducted from the bank balance of cash.

2. Outstanding checks refer to checks that have been:
A. Written, recorded, sent to payees, and received and paid by the bank.
B. Written and not yet recorded in the company books.
C. Held as blank checks.
D. Written, recorded on the company books, sent to the payee, but have not yet been paid by the bank.
E. Issued by the bank.

3. On a bank reconciliation, the amount of an unrecorded bank service charge should be:
A. Added to the book balance of cash.
B. Deducted from the book balance of cash.
C. Added to the bank balance of cash.
D. Deducted from the bank balance of cash.
E. Noted in memorandum form only.

4. A check that was outstanding on last period's bank reconciliation was not among the cancelled checks returned by the bank this period. As a result, in preparing this period's reconciliation, the amount of this check should be:
A. Added to the book balance of cash.
B. Deducted from the book balance of cash.
C. Added to the bank balance of cash.
D. Deducted from the bank balance of cash.
E. Ignored in preparing the period's bank reconciliation.

5. A company made a bank deposit on September 30 that did not appear on the bank statement dated as of September 30. In preparing the September 30 bank reconciliation, the company should:
A. Deduct the deposit from the bank statement balance.
B. Send the bank a debit memorandum.
C. Deduct the deposit from the September 30 book balance and add it to the October 1 book balance.
D. Add the deposit to the book balance of cash.
E. Add the deposit to the bank statement balance.   

6. If a check correctly written and paid by the bank for $794 is incorrectly recorded in the company's books for $749, how should this error be treated on the bank reconciliation?
A. Subtract $45 from the bank's balance.
B. Add $45 to the bank's balance.
C. Subtract $45 from the book balance.
D. Add $45 to the book balance.
E. Subtract $45 from the bank's balance and add $45 to the book's balance.

7. In the process of reconciling Marks Enterprises' bank statement for September, Mr. Marks compiles the following information:   
The adjusted cash balance per the books on September 30 is:
A. $6,900
B. $8,160
C. $4,600
D. $6,520
E. $5,840

8. The interest accrued on $6,500 at 6% for 60 days is:
A. $36.
B. $42.
C. $65.
D. $180.
E. $420.

9. A company borrowed $10,000 by signing a 180-day promissory note at 11%. The total interest due on the maturity date is.
A. $50
B. $275
C. $550
D. $825
E. $1,100

10. A method of estimating bad debts expense that involves a detailed examination of outstanding accounts and their length of time past due is the:
A. Direct write-off method.
B. Aging of accounts receivable method.
C. Percentage of sales method.
D. Aging of investments method.
E. Percent of accounts receivable method.

11. On December 31 of the current year, a company's unadjusted trial balance included the following: Accounts Receivable, debit balance of $97,250; Allowance for Doubtful Accounts, credit balance of $951. What amount should be debited to Bad Debts Expense, assuming 6% of outstanding accounts receivable at the end of the current year will be uncollectible?
A. $951.
B. $3,992.
C. $4,884.
D. $5,835.
E. $6,786.

12. The amount due on the maturity date of a $6,000, 60-day 8%, note receivable is:
A. $6,000.
B. $6,480.
C. $5,520.
D. $6,080.
E. $5,920.

13. Paoli Pizza bought $5,000 worth of merchandise from TechCom and signed a 90-day, 10% promissory note for the $5,000. TechCom's journal entry to record the sales portion of the transaction is:
A. Debit Accounts Receivable $5,000; credit Sales $5,000.
B. Debit Notes Receivable $5,000; credit Sales $5,000.
C. Debit Accounts Receivable $5,125; credit Sales $5,125.
D. Debit Notes Receivable $5,125; credit Sales $5,125.
E. Debit Notes Receivable $5,000; debit Interest Receivable $125; credit Sales $5,125.

14. Teller purchased merchandise from TechCom on October 17 of the current year and TechCom accepted Teller's $4,800, 90-day, 10% note. What entry should TechCom make on December 31, to record the accrued interest on the note?
A. Debit Cash $20; credit Notes Receivable $20.
B. Debit Cash $100; credit Notes Receivable $100.
C. Debit Interest Receivable $20; credit Interest Revenue $20.
D. Debit Interest Receivable $100; credit Interest Revenue $100.
E. Debit Cash $120; credit Interest Revenue $100; credit Interest Receivable $20.

15. The Allowance for Doubtful Accounts:
A. Is a contra asset account.
B. Is used instead of reducing accounts receivable directly.
C. Is debited when uncollectible accounts are written off.
D. All of these.
E. Is credited when bad debts expense is estimated and recorded.

16. On November 19, Hayes Company receives a $15,000, 60-day, 10% note from a customer as payment on his account. What adjusting entry should be made on the December 31 year-end?
A. Debit Interest Receivable $175; credit Interest Revenue $175.
B. Debit Interest Receivable $250; credit Interest Revenue $250.
C. Debit Interest Receivable $75; credit Interest Revenue $75.
D. Debit Interest Revenue $175; credit Interest Receivable $175.
E. Debit Interest Revenue $250; credit Interest Receivable $250.

17. The relevant factor(s) in computing depreciation include:
A. Cost.
B. Salvage value.
C. Useful life.
D. Depreciation method.
E. All of these.

18. Depreciation:
A. Measures the decline in market value of an asset.
B. Measures physical deterioration of an asset.
C. Is the process of allocating to expense the cost of a plant asset.
D. Is an outflow of cash from the use of a plant asset.
E. Is applied to land.

19. Lomax Enterprises purchased a depreciable asset for $22,000 on March 1, Year 1. The asset will be depreciated using the straight-line method over its four-year useful life. Assuming the asset's salvage value is $2,000, what will be the amount of accumulated depreciation on this asset on December 31, Year 4?
A. $5,000.00
B. $4,166.67
C. $16,666.68
D. $20,000.00
E. $19,166.67

20. A company purchased a delivery van for $23,000 with a salvage value of $3,000 on September 1, Year 1. It has an estimated useful life of 5 years. Using the straight-line method, how much depreciation expense should the company recognize on December 31, Year 1?
A. $1,000.
B. $1,333.
C. $1,533.
D. $4,000.
E. $4,600.

21. The Betsy Dough Company wants to prepare bank reconciliation for the month of June. When the bank statement for the month of June arrives from the bank, the following steps are performed:

1. The deposits to the bank account, as recorded on the bank statement, are compared to the deposit slips retained by the company. It is noted that the last deposit, of $400, occurred after banking hours on the day of the bank statement and therefore has not been recorded by the bank on this bank statement.

2. Checks returned with the bank statement are compared to the checks written and listed in checkbook. This comparison shows that there are checks outstanding amounting to $1,456.

3. The ending balances on the statement and in the company’s books are determined. The ending bank statement balance is exactly $10,129 whereas the books show $9,000.

4. Other information contained on the bank statement, not previously known to the company, is determined. This includes the following: (a) a note from a customer for $200 has been collected by the bank and credited to our account; (b) a check from Frank Ony for $120 previously deposited by us has been returned for lack of sufficient funds; (c) the bank has charged us $25 for its services.

5. Check number 141 was written for $235 and cleared the bank for $235, but was recorded in the company records as $253.
Use Word or Excel to prepare the bank reconciliation for the Betsy Dough Company at June 30, 2012.

Solution Preview

This material may consist of step-by-step explanations on how to solve a problem or examples of proper writing, including the use of citations, references, bibliographies, and formatting. This material is made available for the sole purpose of studying and learning - misuse is strictly forbidden.

1. The answer is option C
2. The answer is option D.
3. The answer is option B....

This is only a preview of the solution. Please use the purchase button to see the entire solution

Related Homework Solutions

Accounting Questions
Homework Solution
$77.00
Accounting
Inventory
Trial
Balance
Retained
Earnings
Count
Dividends
Interest
Income
Statement
Cash
Flow
Accounting Questions
Homework Solution
$28.00
Business
Accounting
Middleham Co.
Balance
Tax
Expense
Cost
loan
Investment
Inventory
Business Questions
Homework Solution
$35.00
Accounting
Business
Economy
Finance
Management
Administration
Balances
T Accounts
Manufacturing Wages
Material Inventory
Labor
Transactions
Journals
Costs
Production
Closing Balance
Cash
Accounting Questions
Homework Solution
$13.00
Accounting
Least
Squares
Line
Slope
Regression
Y-intercept
Correlation
Coefficient
P-value
Randomly
Accounting Questions
Homework Solution
$50.00
Accounting
Relevant
Costs
Future
Myopic
Behavior
Centralization
ROI
Titanic
Revenue
Budget
Market
Get help from a qualified tutor
Live Chats