QUESTIONS -
Q1. A company received a bank statement showing a balance of $78,000. Reconciling items included outstanding checks of $2,400 and a deposit in transit of $9,400. What is the company's adjusted bank balance?
$66,200
$71,000
$85,000
$68,600
Q2. The cash ratios of four companies are listed below.
|
Company
|
Cash Ratio
|
|
Juan Corp.
|
0.23
|
|
Rose, Inc.
|
0.14
|
|
Freelance, Inc.
|
0.20
|
|
Pioneer Corp.
|
0.28
|
Which company has the maximum ability to repay its current liabilities?
Juan Corp.
Rose, Inc.
Freelance, Inc.
Pioneer Corp.
Q3. No journal entries are required for the reconciling items on the bank side because __________.
those transactions have already been recorded in the company's ledger
the adjusted balances on both sides are the same amounts
the amounts are immaterial
those transactions are already included in the bank balance
Q4. Cash and cash equivalents are divided by __________ to determine the cash ratio.
total current liabilities
fixed assets
equity
total long-term liabilities
Q5. Fingertips, Inc. had the following financial data for the year ended December 31, 2017.
|
Cash
|
$41,000
|
|
Cash equivalents
|
76,000
|
|
Long term investments
|
58,000
|
|
Total current liabilities
|
146,000
|
What is the cash ratio as of December 31, 2017, for Fingertips, Inc.?
0.28
0.40
0.47
0.80
Q6. Which one of the following items requires an adjustment on the bank side of the bank reconciliation?
Interest earned
A bank service charge
A note collected by the bank
Deposits in transit
Q7. A company's Cash account shows an ending balance of $4,400. Reconciling items included a bookkeeper error of $100 (a $500 check recorded as $600), two outstanding checks totaling $810, a service charge of $25, a deposit in transit of $250, and interest revenue of $30. What is the adjusted book balance?
$4,295
$3,840
$4,505
$4,960
Q8. The petty cash fund had an initial imprest balance of $210. It currently has $17 in cash, $4 in miscellaneous cash receipts, and an additional $183 in specific cash receipts. The debit to Cash Short & Over would be __________.
$6
$17
$183
$187
Q9. A company has a cash ratio of 2.3. What does this imply?
The company has an unnecessarily large amount of cash supply.
The company does not have enough cash supply.
The company is not in a position to pay off its long-term liabilities.
The company is not in a position to pay off its current liabilities.
Q10. Which of the following would be included in the entry to record the replenishment of a petty cash fund?
A credit to Petty Cash
A debit to Accounts Receivable
A credit to Cash
A credit to Miscellaneous Expense
Q11. Which of the following statements is TRUE of the Sarbanes-Oxley Act?
Accounting firms are allowed to provide both auditing services and a full range of consulting services to their public company clients.
Those who commit securities fraud must be sentenced to 10 years in prison.
All private and foreign companies must issue an internal control report evaluated by an outside auditor.
The Public Company Accounting Oversight Board oversees the work of auditors of public companies.
Q12. The bookkeeper of Fire Steel, Inc. recorded a $1,596 check as $15,960 in payment of the current month's rent. Which of the following journal entries is needed to adjust for this error in the books of the company?
A. Cash 14,364
Sales Revenue 14,364
B. Rent Expense 15,960
Cash 15,960
C. Cash 14,364
Rent Expense 14,364
D. Booking Error 1,596
Cash 1,596
Q13. A company received a bank statement with a balance of $6,000. Reconciling items included a bookkeeper error of $300-a $300 check recorded as $800-two outstanding checks totaling $840, a service charge of $21, a deposit in transit of $250, and interest revenue of $19. What is the adjusted bank balance?
$4,950
$5,110
$4,608
$5,410
Q14. A check was written by a business for $507 but was recorded in the journal as $705. How would this error be included on the bank reconciliation?
A deduction on the bank side
An addition on the book side
An addition on the bank side
A deduction on the book side