Chapter 6 - Multiple Choice - principlesofaccounting.com

1. Question

The Cash account on the balance sheet should not include which of the following items:

Travel advances to employees
Currency
Money orders
Deposits in transit

2. Question

A credit memorandum accompanying a bank statement would occur for which of the following items?

A previously deposited customer check which was returned NSF.
Bank service charges for the month.
The proceeds of a note collected by the bank are deposited to the account.
Each of the above.

3. Question

When reconciling the ending cash balance per the bank statement to the correct adjusted cash balance, how would deposits in transit be handled?

Added to the balance per the bank statement.
Subtracted from the balance per the bank statement.
Added to the balance per company records.
Ignored.

4. Question

A bank reconciliation sometimes points to the need for adjusting entries. In general, the source of the adjustments is:

the reconciliation of the ending balance per the bank statement to the adjusted cash balance.
the reconciliation of the cash balance per the company records to the adjusted cash balance.
both a and b.
none of the above.

5. Question

Malory Company provides the following information about the month-end bank reconciliation:

Ending cash per bank statement

$1,367

Ending cash per company records

7,383

Monthly bank service charge

25

Deposits in transit at month-end

8,345

Outstanding checks at month-end

2,399

Customer check returned NSF

45

The correct ending cash balance is:

$4,914
$7,268
$7,313
$7,383

6. Question

Malory Company provides the following information about the month-end bank reconciliation:

Ending cash per bank statement

$1,367

Ending cash per company records

7,383

Monthly bank service charge

25

Deposits in transit at month-end

8,345

Outstanding checks at month-end

2,399

Customer check returned NSF

45

What journal entry should be recorded to cause the company records to be correct?

Cash 70

Cash Short & Over 70
Miscellaneous Expense 70

Cash 70
Miscellaneous Expense      25

Accounts Receivable      45

                        Cash                        70
Miscellaneous Expense 2,399

Cash 2,399

7. Question

When using a petty cash system, the replenishment of the fund would normally include a debit to:

Cash.
Petty Cash.
Revenues.
None of the above.

8. Question

Short-term investments owned by a company are:

reported on the balance sheet as a current asset.
reported on the balance sheet as a noncurrent asset.
reported on the balance sheet as a contra-equity account.
reported on the balance sheet as a reduction of liabilities.

Chapter 6 - Multiple Choice