30 questions

1. If a check correctly written and paid by the bank for $629 is incorrectly recorded on the company's books for $692, the appropriate treatment on the bank reconciliation would be to

deduct $629 from the book's balance.

add $63 to the book's balance.

subtract $63 from the book's balance.

deduct $63 from the bank's balance.

2. A check written by the company for $119 is incorrectly recorded by a company as $191. On the bank reconciliation, the $72 error should be

added to the balance per bank.

added to the balance per books.

deducted from the balance per bank.

deducted from the balance per books.

3. Pina Colada Corp. had checks outstanding totaling $35600 on its June bank reconciliation. In July, Pina Colada Corp. issued checks totaling $256700. The July bank statement shows that $173600 in checks cleared the bank in July. A check from one of Pina Colada Corp.'s customers in the amount of $2000 was also returned marked "NSF." The amount of outstanding checks on Pina Colada Corp.'s July bank reconciliation should be

$118700.

$83100.

$116700.

$47500.

4. Swifty Corporation gathered the following reconciling information in preparing its April bank reconciliation:

Cash balance per books, 4/30		$13400
Deposits in transit		1800
Notes receivable and interest collected by bank		4500
Bank charge for check printing		150
Outstanding checks		9100
NSF check		850

The adjusted cash balance per books on April 30 is

$18700.

$17900.

$18600.

$16900.

5. For which of the following errors would the appropriate amount be subtracted from the balance per books on a bank reconciliation?

A returned $600 check recorded by the bank as $60.

Check written for $63, but recorded by the company as $36.

Check written for $57, but recorded by the company as $75.

Deposit of $100 recorded by the bank as $10.

6. Sunland company gathered the following reconciling information in preparing its June bank reconciliation:

Cash balance per books, 6/30		$11100
Deposits in transit		800
Notes receivable and interest collected by bank		1950
Bank charge for check printing		65
Outstanding checks		4000
NSF check		370

The adjusted cash balance per books on June 30 is

$13415.

$12615.

$13355.

$13050.

7. While preparing the bank reconciliation, you notice that a check, written by the company for $780, has been outstanding for 5 months. What is the best action for you to take?

Issue a replacement check because you assume the original check has been lost.

Wait 3 more months to give the bank more time to clear the check.

Void the check. If it has not been cashed in 5 months, it will never be cashed.

Investigate to determine why the check has not cleared.

8. A check written by the company for $232 is incorrectly recorded by a company as $223. On the bank reconciliation, the $9 error should be

deducted from the balance per bank.

deducted from the balance per books.

added to the balance per books.

added to the balance per bank.

9.The following information was taken from Kingbird, Inc. cash budget for the month of April

Beginning cash balance		$137000
Cash receipts		123000
Cash disbursements		155000
Depreciation		30000

If the company has a policy of maintaining an end of the month cash balance of $114000, the amount the company would have to borrow is

$32000.

$9000.

$0.

$132000.

10.The following credit sales are budgeted by Sunland Company:

February		192000
March		268800
April		230400

The company’s past experience indicates that 70% of the accounts receivable are collected in the month of sale, 30% in the month following the sale. The anticipated cash inflow for the month of April is

$150528.

$215040.

$241920.

$176256.

11. A $200 petty cash fund has cash of $25 and receipts of $210. The journal entry to replenish the account would include a credit to

Cash for $210.

Cash for $175.

Cash Over and Short for $25.

Petty Cash for $175.

12. Expected direct materials purchases in Concord Corporation are $504000 in the first quarter and $648000 in the second quarter. Forty percent of the purchases are paid in cash as incurred, and the balance is paid in the following quarter. The budgeted cash payments for purchases in the second quarter are:

$507600.

$648000.

$561600.

$691200.

13. Pharoah company is preparing a cash budget for September. The company’s cash balance on September 1 is $25060. The company anticipates cash receipts of $120740 and cash disbursements of $126710. If Pharoah company desires a cash balance of $25920, it must

acquire financing of $5110.

acquire financing of $19950.

acquire financing of $6830.

acquire financing of $860.

14. The following credit sales are budgeted by Tamarisk, Inc.:

January		$318200
February		468000
March		655200
April		561600

The company’s past experience indicates that 70% of the accounts receivable are collected in the month of sale, 20% in the month following the sale, and 8% in the second month following the sale. The anticipated cash inflow for the month of March is

$577696.

$561600.

$550360.

$524160.

15. For which of the following errors should the appropriate amount be added to the balance per bank on a bank reconciliation?

Check for $75 recorded by the company as $57.

Check for $83 recorded by the company as $38.

A returned $400 check recorded by the bank as $40.

Deposit of $100 recorded by the bank as $10.

16. For which of the following errors should the appropriate amount be subtracted from the balance per bank on a bank reconciliation?

Check for $73 recorded by the company as $37.

A returned $100 check recorded by the bank as $10.

Deposit of $300 recorded by the bank as $30.

Check for $75 recorded by the company as $57.

17. For which of the following errors would the appropriate amount be added to the balance per books on a bank reconciliation?

Check written for $56, but recorded by the company as $65.

A returned $100 check recorded by the bank as $10.

Deposit of $1000 recorded by the bank as $100.

Check written for $93, but recorded by the company as $39.

18. Vaughn Manufacturing had checks outstanding totaling $34700 on its May bank reconciliation. In June, Vaughn Manufacturing issued checks totaling $217100. The June bank statement shows that $161600 in checks cleared the bank in June. A check from one of Vaughn Manufacturing's customers in the amount of $1600 was also returned marked "NSF." The amount of outstanding checks on Vaughn Manufacturing's June bank reconciliation should be

$88600.

$20800.

$55500.

$90200.

19. Blue Spruce Corp. gathered the following reconciling information in preparing its August bank reconciliation:

Cash balance per books, 8/31		$32500
Deposits in transit		1400
Notes receivable and interest collected by bank		7900
Bank charge for check printing		190
Outstanding checks		18600
NSF check		1580

The adjusted cash balance per books on August 31 is

$21390.

$38630.

$37230.

$22830.

20. A $157 petty cash fund has cash of $32 and receipts of $123. The journal entry to replenish the account would include a

credit to Cash Over and Short for $2.

credit to Cash for $125.

debit to Cash for $123.

credit to Petty Cash for $123.

21. A $300 petty cash fund has cash of $37 and receipts of $245. The journal entry to replenish the account would include

credit to Petty Cash for $245.

debit to Cash for $245.

credit to Cash for $263.

debit to Petty Cash for $263.

22. A $209 petty cash fund has cash of $43 and receipts of $205. The journal entry to replenish the account would include a

credit to Petty Cash for $166.

credit to Cash Over and Short for $39.

credit to Cash for $205.

debit to Cash for $166.

23. The following information was taken from Sheridan Company cash budget for the month of July:

Beginning cash balance		$105000
Cash receipts		101000
Cash disbursements		143000

If the company has a policy of maintaining an end of the month cash balance of $105000, the amount the company would have to borrow is

$21000.

$28000.

$42000.

$63000

24. In the month of May, Sheridan Company wrote checks in the amount of $62200. In June, checks in the amount of $85062 were written. In May, $56905 of these checks were presented to the bank for payment and $73134 in June. What is the amount of outstanding checks at the end of May?

$11928.

$23856.

$17223.

$5295.

25. Windsor, Inc. assembled the following information in completing its March bank reconciliation:

Balance per bank		$16400
Outstanding checks		$3325
Deposits in transit		$5400
NSF check		$340
Bank service charge		$110
Cash balance per books		$18925

As a result of this reconciliation, Windsor will

reduce its cash account by $2075.

reduce its cash account by $110.

increase its cash account by $230.

reduce its cash account by $450.

26.Blue Spruce Corp. assembled the following information in completing its March bank reconciliation:

Balance per bank		$16500
Outstanding checks		$2880
Deposits in transit		$4600
NSF check		$297
Bank service charge		$90
Cash balance per books		$16330

As a result of this reconciliation, Blue will

reduce its cash account by $1720.

reduce its cash account by $90.

reduce its cash account by $387.

increase its cash account by $207.

27. In the month of November, Marigold Corp. wrote checks in the amount of $43300. In December, checks in the amount of $59239 were written. In November, $39630 of these checks were presented to the bank for payment and $50932 in December. What is the amount of outstanding checks at the end of December?

$11977.

$3670.

$16614.

$8307.

28 At April 30, Sunland Company has the following bank information:

Cash balance per bank		$3500
Outstanding checks		$270
Deposits in transit		$550
Credit memo for interest		$10
Bank service charge		$20

What is Sunland adjusted cash balance on April 30?

$3770.

$3780.

$3220.

$3750.

29. If a check correctly written and paid by the bank for $486 is incorrectly recorded on the company’s books for $468, the appropriate treatment on the bank reconciliation would be to

add $18 to the book’s balance.

subtract $18 from the book’s balance.

deduct $18 from the bank’s balance.

deduct $486 from the book’s balance.