BANK RECONCILIATION 1.

The transfer journal would be most likely to be used as the book of prime entry to record which of the following double entries ? a. A cash sale b. The payment of a supplier c. The purchase of a long-term asset d. Discount received 2. Who should not prepare a creditors control ? a. Accounts supervisor b. Purchase day book clerk c. Sales day book clerk d. Assistant accountant 3. What is not a purpose of control accounts ? a. Provide a total of debtors and creditors at any time b. Avoid preparation of sales ledger accounts c. Identify errors in the day books and posting to the general ledger d. Check the accuracy of entries in the individual accounts 4. Which of the following items would you adjust the cash book for when preparing a bank reconciliation statement ? i. Outstanding deposits ii. Unpresented cheques iii. Standing order payment omitted iv. Bank charges a. I,ii b. I,iv c. I,ii,iv d. Iii and iv 5. The balance on the cash account for a business at the end of June was an overdraft of $89.93. At that date there were also unpresented cheques totaling $154.38 and an outstanding deposit of $60.00. It was also discovered that during the month of June the bank had charged the business interest on its overdraft for the previous wuater of $16.45 What is the correct balance on the cash account at the end of June ? a. $73.48 overdrawn b. $ 106.38 overdrawn c. $167.86 overdrawn d. $200.76 overdrawn 6. A business has a debit balance on its cash book of $148 but the bank statement shows a different balance. The following items have also been discovered: - The bank statement shows that there were bank charges for the period of $10 which have not been recorded in the cash account; - A standing order payment for $25 has also been mistakenly omitted from the cash account; - Cheques totaling $125 had been written and posted to suppliers but had not yet been presented; 1

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A cheque for $85 had been paid into bank but was still outstanding What is the balance on the bank statement ? a. $73 b. $113 c. $153 d. $223 The bank statement shows a balance at the bank of $1,360, whilst the cash book balance on the same date is $1,250. The discrepancy can be explained by: a. Unpresented ledgement of $110 b. Bank charges of $110 not yet recorded in the cash book c. Bank interest received of $55 credited in the cash book d. A dishonoured cheque for $55 which the business did not know about until it was returned, after the date of the bank statement On 31 December Jolyns cash book shows a balance of $293. The bank statement for 31 December shows a balance of $151. The difference could be due to : a. Uncredited lodgements for which adjustment to the cash book is necessary b. Uncredited lodgements for which no adjustment to the cash book is necessary c. Bank interest received as revealed by the bank statement, for which adjustment to the cash book is necessary d. Bank interest received as revealed by the bank statement, for which no adjustment to the cash book is necessary Which of the following statement is true ? Uncredited lodgement a. Constitute an error in the cash book b. Constitute an error in the bank statement c. Result from the cash book being out of date compare with the bank statement d. Result from the bank statement being out of date compare with the bank statement Which of the following would not affect bank reconciliation ? a. Dishonoured cheque b. Discount received c. Bank interest d. Lodgement not presented A cheque appears in the bank statement the same day as it appears in the cash book. Why would this occur ? a. It has been posted to the payee b. It has been used to withdraw cash for wages c. It has gone through the bank clearing system d. It represents payment to a shopkeeper in a foreign country Which document in a well run sole trader business show the same balance as recorded in the business cash book ? a. The latest cheque book counterfoil b. The bank statement c. The paying in book d. The petty cash book 2

13. Which transaction is recorded in the bank before the business cash book ? a. A cashed cheque b. Payment of a credit card bill c. Bank charges d. A cash sale 14. Which of the following is not a statement which reconciles or controls ? a. Bank reconciliation statement b. Control account c. Computerised ledger account d. Trial balance 15. Which of the following would not appear in a bank statement ? a. A credit card purchase b. A debit card purchase c. A BACS transfer to pay wages d. An EFTPOS transfer for an internet sale 16. When would a trial balance not agree ? a. When the bank reconciliation indicates there are outstanding itmes in the clearing system b. When sales ledger control account indidicates there is a contra item with the purchase ledger control account c. When a supplier statement omits an invoice for goods received d. When the analysis columns in the petty cash book have not been recorded in the general ledger