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A02 Principles of Accounting I Exam 8 Answers (Ashworth College)

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A02 Principles of Accounting I Exam 8 Answers (Ashworth College)

Question 1 of 20

5.0/ 5.0 Points

Endorsing a check __________.

 

 

 

A. guarantees payment

 

 

B. transfers the right to deposit or transfer cash

 

 

C. cancels the transaction

 

 

D. All of these answers are correct.

 

 

Question 2 of 20

5.0/ 5.0 Points

Advantages of on-line banking include __________.

 

 

 

A. convenience

 

 

B. transaction speed

 

 

C. effectiveness

 

 

D. All of the above answers are correct.

 

 

Question 3 of 20

5.0/ 5.0 Points

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

 

 

 

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

 

 

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

 

 

C. They would be added to the balance per books.

 

 

D. They would be ignored.

 

 

Question 4 of 20

0.0/ 5.0 Points

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

 

 

 

A. error made by the bank

 

 

B. outstanding checks

 

 

C. bank service charges

 

 

D. deposit in transit

 

 

Question 5 of 20

5.0/ 5.0 Points

Checks that have been processed by the bank and are no longer negotiable are __________.

 

 

 

A. outstanding checks

 

 

B. canceled checks

 

 

C. checks in process

 

 

D. blank checks

 

 

Question 6 of 20

5.0/ 5.0 Points

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

 

 

 

A. increase their cash account on the company's books

 

 

B. decrease their cash account on the company's books

 

 

C. increase the ending cash balance on the bank statement

 

 

D. decrease the ending cash balance on the bank statement

 

 

Question 7 of 20

5.0/ 5.0 Points

The bank statement shows __________.

 

 

 

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

 

 

B. the checks the bank has paid and any deposits received

 

 

C. any other charges or additions to the bank balance

 

 

D. All of these answers are correct.

 

 

Question 8 of 20

5.0/ 5.0 Points

Outstanding checks __________.

 

 

 

A. have been subtracted on the bank records but not the checkbook records

 

 

B. have not been presented to the bank for payment and have not been subtracted from the checkbook

 

 

C. have not been presented to the bank for payment but have been subtracted in the checkbook

 

 

D. have been returned to the business for nonpayment

 

 

Question 9 of 20

5.0/ 5.0 Points

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

 

 

 

A. checks outstanding and deposits in transit

 

 

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

 

 

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

 

 

D. None of these answers are correct.

 

 

Question 10 of 20

5.0/ 5.0 Points

A full endorsement on a check __________.

 

 

 

A. is the same as a blank endorsement

 

 

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

 

 

C. is the safest endorsement for businesses

 

 

D. does none of the above

 

 

Question 11 of 20

0.0/ 5.0 Points

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

 

Bank statement ending cash balance

$2,000

General ledger cash balance ending

3,250

Bank monthly service charge

45

Deposits in transit

2,500

Outstanding checks

1,500

NSF check returned with bank statement

205

 

 

 

A. $3,000

 

 

B. $4,250

 

 

C. $4,000

 

 

D. $5,500

 

 

Question 12 of 20

5.0/ 5.0 Points

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

 

 

 

A. It is added to the bank balance.

 

 

B. It is shown as a debit memo.

 

 

C. It is shown as a credit memo.

 

 

D. None of these answers are correct.

 

 

Question 13 of 20

0.0/ 5.0 Points

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

 

Bank statement ending cash balance

$2,000

General ledger cash balance ending

3,250

Bank monthly service charge

45

Deposits in transit

2,500

Outstanding checks

1,500

NSF check returned with bank statement

205

 

 

 

 

A. $3,000

 

 

B. $4,250

 

 

C. $4,000

 

 

D. $5,500

 

 

Question 14 of 20

5.0/ 5.0 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

$2,350

Customer's check returned—NSF

500

Customer's note collected by the bank

600

Deposits in transit, November 30

1,400

Outstanding checks, November 30

2,650

 

 

 

 

A. $1,250

 

 

B. $1,100

 

 

C. $1,550

 

 

D. $1,350

 

 

Question 15 of 20

5.0/ 5.0 Points

The drawee is the __________.

 

 

 

A. person who writes the check

 

 

B. bank that drawer has an account with

 

 

C. the person to whom the check is payable

 

 

D. the person who reconciles the account

 

 

Question 16 of 20

5.0/ 5.0 Points

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

 

 

 

A. pay the amount written in words

 

 

B. return the check unpaid

 

 

C. contact the drawer to see what was meant

 

 

D. All of these answers are correct.

 

 

Question 17 of 20

5.0/ 5.0 Points

The bank charged another company's check against our account, this would be included on the bank reconciliation as a(n. __________.

 

 

 

A. addition to the balance per books

 

 

B. subtraction from the balance per books

 

 

C. addition to the balance per bank

 

 

D. subtraction from the balance per bank

 

 

Question 18 of 20

0.0/ 5.0 Points

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

 

 

 

A. deposit in transit

 

 

B. check outstanding

 

 

C. bank service charge

 

 

D. note collected by the bank

 

 

Question 19 of 20

5.0/ 5.0 Points

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

 

 

 

A. Employees will be rotated.

 

 

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

 

 

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

 

 

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

 

 

Question 20 of 20

0.0/ 5.0 Points

A bank service charge would be included on the bank reconciliation as a(n. __________.

 

 

 

A. addition to the balance per books

 

 

B. subtraction from the balance per books

 

 

C. addition to the balance per bank

 

 

D. subtraction from the balance per bank

 

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