Chater 7
Master Your Banking Knowledge
Test your understanding of banking concepts with this engaging quiz! Dive into topics such as bank statements, cash management, and internal controls to refresh your financial literacy.
Get ready to explore:
- Bank account basics
- Cash equivalents
- Petty cash management
- Bank reconciliation techniques
A bank statement
Lets a depositor know the financial position of the bank as of a certain date
Is a credit reference letter written by the depositors bank
Is a bill from the bank for services rendered
Shows the activity which increased or decreased the depositors account balance
Which of the following would NOT cause a bank to debit a depositors account?
Bank service charge
Collection of a note receivable
Wiring of funds to other locations
Checks marked NSF
A company maintains the asset account, cash in bank, on its books, while the bank maintains a reciprocal account which is
A contra-asset account
A liability account
Also an asset account
An owner's equity account
A deposit made by a company will appear on the bank statement as a
Debit
Credit
Debit memorandum
Credit memorandum
A check returned by the bank marked NSF means
No service charge
No signature found
Not satisfactorily filled-out
Not sufficient funds
A debit memorandum would NOT be issued by the bank for
A bank service charge
The issuance of travelers checks
The wiring of funds
The collection of a notes receivable
Only large companies need to be concerned with a system of internl accounts
True
False
The petty cash fund eliminates the need for a bank cheking account
True
False
A bank reconciliation is generally prepared by the bank and sent to the depositor along with cancelled checks
True
False
Cash equivalents are highly liquid investments that can be converted into a specific amout of cash
True
False
Internal control consists of the plan of organization and all of the related methods and measures adopted with in a business to (a) safeguard its assets, (b) enhance the accuracy and reliability of its accounting records
True
False
A debit balance in cash over and short is reported as a
Contra asset
Misc asset
Misc expense
Misc revenue
A petty cash fund of $100 is replenished when the fund contains $3 in cash and receipts for $93. The entry to replenish the fund would
Credit cash over and short for $4
Credit misc revenue for $4
Debit cash over and short for $4
Debit misc expense for $4
Entries are made to the petty cash account when
Establishing the fund
Making payments out of the fund
Recording shortrages in the fund
Replenishing the fund
Which one of the following is NOT necessarily a party to a check?
Maker
Buyer
Payee
Payer
On a bank reconciliation, deposits in transit are
Added to the bank balance
Deducted from the bank balance
Added to the book balance
Deducted from the book balance
In preparing a bank reconciliation, outstanding checks are
Added to the balance per bank
Deducted from the balance per books
Added to the balance per books
Deducted from the balance per bank
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