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Exam 9: Cash Receipts, Cash Payments, and Banking Procedures

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Question 21

Multiple Choice

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Which of the following would not be shown as an adjustment to the book balance on a bank reconciliation statement?

A) a charge for printing new checks
B) bank service charges
C) NSF checks
D) deposits in transit

E) B) and C)
F) All of the above

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Question 22

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Riley's Company uses the perpetual inventory system and had the following transactions during the month of May. Record the transactions in the general journal on page 2. (Omit explanations.) May 1 Sold goods originally costing $200, to B. White for $1,000 on credit. Terms 2/10,n/30 May 7 Received payment from B. White for the purchase made on May 1. (The customer paid Riley within the discount period.) May 10 Purchased $8,000 of goods on account from KK Supplies, terms 2/10, n/30. May 15 Returned $500 of goods purchased from KK Supplies due to inferior quality. May 29 Issued check to pay for goods purchased on account from KK Supplies. Original invoice amount was $8,000 but Riley paid within the discount period of 2/10, n/30 and they also remembered to reduce the check amount due to the return on the 15th.

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Question 23

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To arrive at an accurate balance on a bank reconciliation statement, an error made by the bank in which the bank deducted a check issued by another business from the balance of the company's bank account should be:

Indicate in which section of the Bank Reconciliation Statement the following reconciling items would appear. - An NSF check from a customer.

The cash receipts journal for Engels Company is shown below. Describe how the amounts would be posted to the accounts receivable subsidiary ledger accounts.

Valerie's Market uses a perpetual inventory system when recording its cash payments and cash receipts. The business sells $6,000 of goods to a charge account customer with terms of 2/10, n/30. If the customer pays within the discount period, the entry to record the receipt of cash from the customer would include:

To arrive at the accurate balance on a bank reconciliation statement, it is necessary to deduct any NSF checks from the bank statement balance.

A firm wrote a check for $282 but the bank deducted $228 from the firm's account for the check. On a bank reconciliation statement this error would be shown as:

To record the payment of sales tax owed, the accountant would debit ________ and credit Cash.

Beckett Co. sold merchandise on account for $12,200, terms 2/10, n/30. Freight charges of $400 were prepaid by the seller and added to the invoice. The customer returned $1,000 of merchandise before making the payment then paid the invoice within the discount period. What is the amount Beckett Co. received?

Included on a firm's bank statement was a credit memorandum, which could indicate:

A(n)-------is a form received from the bank showing all transactions recorded in the depositor's account during the month.

The entry to replenish petty cash includes a debit to the various expense and asset accounts and a credit to Cash.

The entry to create a petty cash fund includes:

Indicate in which section of the Bank Reconciliation Statement the following reconciling items would appear. - A service charge charged by the bank.

The individual amounts in the Sales Credit column of the cash receipts journal are posted to the accounts receivable subsidiary ledger.

Sepulveda Inc. uses the perpetual inventory system when recording its cash payments and cash receipts. If the company receives a check from a customer for goods sold and it is received within the discount period, identify the account used to record the discount.

A sale of merchandise for cash would be recorded in:

The March bank reconciliation statement for Cab World, Inc., showed an NSF check of $300 from A. Brown as well as a bank service charge of $20 for monthly service fees. Which of the following is the correct journal entry required to record these items.

Indicate in which section of the Bank Reconciliation Statement the following reconciling items would appear. - A canceled check for $147 erroneously listed on bank statement as $74.