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TEST BANK IN CASH – LEGAL SIZE
ACCNTFI
MR. ALBNERT C. CHAN, BSC, CPA, MBA
3RD TERM DLS-CSB

Ex. 173

The cash balance per books for Dexter Company on September 30, 2008 is $10,740.93. The following checks and receipts were recorded for the month of October, 2008:

ChecksReceipts
No. Amount No. Amount Amount Date
17$372.9622$ 578.84$843.8610/ 5
18$780.6223$1,687.50$941.5410/21
19$157.0024$ 921.30$808.5810/27
20$587.5025$ 246.03$967.0010/30
21$234.15
In addition, the bank statement for the month of October is presented below:

Balance Deposits and CreditsChecks and Debits Balance
Last StatementNo.Total AmountNo.Total AmountThis Statement ———————————————————————————————————————— $5,404.845$9,178.3610$3,632.19$10,951.01
———————————————————————————————————————— Checks and other debits DepositsDateBalance
——————————————————————— No.AmountNo.AmountNo.Amount
———————————————————————————————————————— 14148.2917372.9622578.845,484.3810/ 1$9,875.31
18708.6224921.30843.8610/ 8$9,219.03
19157.0025246.03941.5410/23$9,541.58
21234.1525.00SC808.5810/29$10,101.01
240.00NSF1,100.00CM10/31$10,951.01
———————————————————————————————————————— Symbols: NSF (Not sufficient funds) SC (Service charge) CM (Credit Memo) ————————————————————————————————————————

Check No. 18 was correctly written for $708.62 for a payment on account. The NSF check was from S. King, a customer, in settlement of an accounts receivable. An entry had not been made for the NSF check. The credit memo is for the collection of a note receivable including interest of $60 which has not been accrued. The bank service charge is $25.00.

Instructions
(a)Prepare a bank reconciliation at October 31.
(b)Prepare the adjusting journal entries required by the bank reconciliation.

MULTIPLE CHOICE
101.Which one of the following would not cause a bank to debit a depositor's account? a.Bank service charge
b.Collection of a note receivable
c.Wiring of funds to other locations
d.Checks marked NSF

102.A company maintains the asset account, Cash in Bank, on its books, while the bank maintains a reciprocal account which is a.a contra-asset account.
b.a liability account.
c.also an asset account.
d.an owner's equity account.

103.A remittance advice attached to a company check provides a.details about the running cash balance in the checking account. b.the magnetic bank routing numbers.
c.the explanation of the purpose of the check.
d.the signature space for the maker.

104.A deposit made by a company will appear on the bank statement as a a.debit.
b.credit.
c.debit memorandum.
d.credit memorandum.

105.A check returned by the bank marked "NSF" means
a.no service fee.
b.no signature found.
c.not satisfactorily filled-out.
d.not sufficient funds.

106.A debit memorandum would not be issued by the bank for
a.a bank service charge.
b.the issuance of traveler's checks.
c.the wiring of funds.
d.the collection of a notes receivable.

107.On a bank reconciliation, deposits in transit are a.added to the bank balance.
b.deducted from the bank balance.
c.added to the book balance.
d.deducted from the book balance.

108.A bank reconciliation should be prepared
a.whenever the bank refuses to lend the company money. b.when an employee is suspected of fraud.
c.to explain any difference between the depositor's balance per books and the balance per bank. d.by the person who is authorized to sign checks.

109.Deposits in transit
a.have been recorded on the company's books but not yet by the bank. b.have been recorded by the bank...
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