Bank Reconciliation Questions and Answers

1. If a check correctly written and paid by the bank for $645 is incorrectly recorded on the company's books for $654, the appropriate treatment on the bank reconciliation would be to

add $9 to the book's balance.

subtract $9 from the book's balance.

deduct $9 from the bank's balance.

deduct $645 from the book's balance.

2. A check written by the company for $109 is incorrectly recorded by a company as $190. On the bank reconciliation, the $81 error should be

added to the balance per books.

deducted from the balance per books.

added to the balance per bank.

deducted from the balance per bank.

3. Pina Colada Corp. had checks outstanding totaling $35600 on its June bank reconciliation. In July, Pina Colada Corp. issued checks totaling $256700. The July bank statement shows that $173600 in checks cleared the bank in July. A check from one of Pina Colada Corp.'s customers in the amount of $2000 was also returned marked "NSF." The amount of outstanding checks on Pina Colada Corp.'s July bank reconciliation should be

$83100.

$118700.

$116700.

$47500.

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

Cash balance per books, 4/30 $15500

Deposits in transit 2100

Notes receivable and interest collected by bank 5210

Bank charge for check printing 180

Outstanding checks 10600

NSF check 990

5. The adjusted cash balance per books on April 30 is

$21640.

$20710.

$19540.

$21520.

6. For which of the following errors would the appropriate amount be subtracted from the balance per books on a bank reconciliation? 

Check written for $83, but recorded by the company as $38.

Deposit of $400 recorded by the bank as $40.

A returned $300 check recorded by the bank as $30.

Check written for $56, but recorded by the company as $65.

7. Pharoah company gathered the following reconciling information in preparing its June bank reconciliation:

Cash balance per books, 6/30 $10600

Deposits in transit 800

Notes receivable and interest collected by bank 1860

Bank charge for check printing 65

Outstanding checks 3800

NSF check 350

8. The adjusted cash balance per books on June 30 is

$12845.

$12460.

$12045.

$12745.

9. While preparing the bank reconciliation, you notice that a check, written by the company for $830, has been outstanding for 5 months. What is the best action for you to take?

Void the check. If it has not been cashed in 5 months, it will never be cashed.

Issue a replacement check because you assume the original check has been lost.

Wait 3 more months to give the bank more time to clear the check.

Investigate to determine why the check has not cleared.

10. A check written by the company for $265 is incorrectly recorded by a company as $256. On the bank reconciliation, the $9 error should be

added to the balance per books.

deducted from the balance per books.

added to the balance per bank.

deducted from the balance per bank.

11. The following information was taken from Nash's Trading Post, LLC cash budget for the month of April

Beginning cash balance $89000

Cash receipts 80000

Cash disbursements 101000

Depreciation 20500

12. If the company has a policy of maintaining an end of the month cash balance of $74000, the amount the company would have to borrow is

$86000.

$21000.

$6000.

$0.

13. The following credit sales are budgeted by Cheyenne Corp.:

February 176000

March 246400

April 211200

14. The company’s past experience indicates that 70% of the accounts receivable are collected in the month of sale, 30% in the month following the sale. The anticipated cash inflow for the month of April is

$137984.

$161568.

$197120.

$221760.

15. A $280 petty cash fund has cash of $55 and receipts of $230. The journal entry to replenish the account would include a credit to

Cash for $225.

Petty Cash for $225.

Cash Over and Short for $55.

Cash for $230.

16. Expected direct materials purchases in Sheffield Corp. are $668000 in the first quarter and $859000 in the second quarter. Forty percent of the purchases are paid in cash as incurred, and the balance is paid in the following quarter. The budgeted cash payments for purchases in the second quarter are:

$916200.

$859000.

$744400.

$690400.

17. Carla Vista company is preparing a cash budget for September. The company’s cash balance on September 1 is $26450. The company anticipates cash receipts of $127450 and cash disbursements of $133740. If Carla Vista company desires a cash balance of $27360, it must

acquire financing of $910.

acquire financing of $7200.

acquire financing of $5380.

acquire financing of $21070.