learning objective 6 7 questions 1 the following represent common reconciling items 4307010

learning objective 6 7 questions 1 the following represent common reconciling items 4307010

Learning Objective 6.7 Questions

1) The following represent common reconciling items within a bank reconciliation:

1. Bank service charges

2. Deposits in transit

3. Outstanding checks

Which of the above items will be an adjustment to the balance per books?

A) 1 only

B) 2 only

C) 3 only

D) 1 and 2

E) 2 and 3

2) In a bank reconciliation, company errors are adjustments to ________. Bank errors are adjustments to ________.

A) balance per bank; balance per bank

B) balance per company; balance per company

C) balance per bank; balance per company

D) balance per company; balance per bank

E) balance per company; balance per IRS

3) The bank reconciliation is

A) only required when a company suspects fraud.

B) supplied as a bank courtesy.

C) needed because the IRS requires it for cash-basis companies.

D) an important part of internal control.

E) usually reported in a company footnote.

4) Novak Industries had a check returned to it labeled “NSF.” What journal entry should Novak Industries make to recognize the $200 NSF check?

A) Accounts receivable 200

Service charges 200

B) Bad debt expense 200

Accounts receivable 200

C) Accounts receivable 200

Bad debt expense 200

D) Allowance for uncollectible accounts 200

Accounts receivable 200

E) Accounts receivable 200

Cash 200

5) Deposits in transit are added to the balance per books when preparing a bank reconciliation.

6) Outstanding checks should be added to the balance per bank when preparing a bank reconciliation.

7) Bank service charges not recorded on the books should be added to the balance per books when preparing a bank reconciliation.

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