ACCN 2010 Chapter 7 Quiz

ACCN 2010 Chapter 7 Quiz | Tulane University

Question 1

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 depositor's bank.

 shows the activities that increased or decreased the depositor's account balance.

 is a bill from the bank for services rendered.

Question 2

An NSF check should appear in which section of the bank reconciliation? 

 Addition to the balance per books.

 Deduction from the balance per books. 

 Addition to the balance per bank.

 Deduction from the balance per bank.

Question 3

Which of the following would be deducted from the balance per bank on a bank reconciliation? 

 Notes collected by the bank.

 Service charges.

 Deposits in transit.

 Outstanding checks.

Question 4

A bank reconciliation should be prepared 

 to explain any difference between the depositor's balance per books with the balance per bank. 

 when an employee is suspected of fraud.

 by the person who is authorized to sign checks.

 whenever the bank refuses to lend the company money.

Question 5

Deposits in transit 

 have not been recorded by the bank or the company.

 are customers’ checks that have not yet been received by the company.

 have been recorded by the bank but not yet by the company.

 have been recorded on the company's books but not yet by the bank.

Question 6

If a check correctly written and paid by the bank for $647 is incorrectly recorded on the company's books for $674, the appropriate treatment on the bank reconciliation would be to 

 add $27 to the book's balance.

 subtract $27 from the book's balance.

 deduct $647 from the book's balance.

 deduct $27 from the bank's balance.

Question 7

Which of the following items on a bank reconciliation would require an adjusting entry on the company’s books? 

 A deposit in transit.

 A bank service charge. 

 Outstanding checks.

 An error by the bank.

Question 8

Notification by the bank that a deposited customer check was returned NSF requires that the company make the following adjusting entry: 

Accounts Receivable

                Cash 

Miscellaneous Expense

        Accounts Receivable 

Cash

                Accounts Receivable

Question 9

Cheyenne Corp. gathered the following reconciling information in preparing its August bank reconciliation: 

Cash balance per books, 8/31                     $24600

Deposits in transit                            1100

Notes receivable and interest collected by bank                                6000

Bank charge for check printing                   140

Outstanding checks                        14100

NSF check                           1200

The adjusted cash balance per books on August 31 is 

 $17260.

 $28160.

 $16260.

 $29260.

Question 10

Sunland Company assembled the following information in completing its March bank reconciliation:

Balance per bank                             $18300

Outstanding checks                        $3725

Deposits in transit                            $6000

NSF check                                         $380

Bank service charge                        $120

Cash balance per books                                $21075

As a result of this reconciliation, Sunland will

 increase its cash account by $260.

 reduce its cash account by $120.

 reduce its cash account by $2275.

 reduce its cash account by $500.

Question 11

Which of the following is not one of the main factors that contribute to fraudulent activity? 

 Financial pressure.

 Rationalization.

 Incompatible duties. .

 Opportunity.

Question 12

Which one of the following is not an objective of a system of internal controls? 

 Reduce the risks of errors.

 Safeguard company assets.

 Enhance the accuracy and reliability of accounting records.

 Overstate liabilities in order to be conservative.

Question 13

When two or more people get together for the purpose of circumventing prescribed controls, it is called 

 collusion.

 a fraud committee.

 bonding of employees.

 a division of duties.

Question 14

Which of the following is not an element of the fraud triangle? 

 Segregation of duties 

 Financial pressure

 Opportunity

 Rationalization