ACCT 200 Lecture Notes - Lecture 8: List Of The Shield Episodes, Bank Reconciliation, Internal Control
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| 10 points | |||
Using the code letters below, indicate howeach of the items listed would be handled in preparing a bankreconciliation. Enter the appropriate code letter in the space tothe left of each item. | ||||
Code | ||||
A | Add to cash balance per books | |||
B | Deduct from cash balance per books | |||
C | Add to cash balance per bank | |||
D | Deduct from cash balance per bank | |||
E | Does not affect the bank reconciliation | |||
Items: | ||||
1 | Outstanding checks. | |||
2 | Bank service charge. | |||
3 | Check for $420 correctly written and paidby the bank but incorrectly entered in the cash payments journalfor $240. | |||
4 | Deposit in transit. | |||
5 | Bank returns deposited check marked NSF. | |||
6 | Bank collects notes receivable and interest for depositor. | |||
7 | Bank debit memorandum for check printing fees. | |||
8 | Petty cash custodian has $91 in paid pettycash vouchers that have not been reimbursed. | |||
9 | Bank charged a check against the companywhich should have been charged to another company. | |||
10 | A check for $246 was correctly paid by thebank but was incorrectly entered in the cash payments journal for$264. | |||
Please answer.
Bank Reconciliation The Chicago Scooter Company's bank statement for the month of June indicated a balance of $3,350. The company's cash account in the general ledger showed a balance of $2,464 on June 30. Other relevant information includes the following:
Deposits in transit on June 30 total $2,550.
The bank statement shows a debit memorandum for a $10 check printing charge.
Check No. 160 payable to Simon Company was recorded in the accounting records for $124 and cleared the bank for this same amount. A review of the records indicated that the Simon account now has an $18 credit balance and the check to them should have been $142.
Outstanding checks as of June 30 totaled $3,100.
Check No. 176 was correctly written and paid by the bank for $203. The check was recorded in the accounting records as a debit to accounts payable and a credit to cash for $230.
The bank returned a NSF check in the amount of $311.
The bank included a credit memorandum for $630 representing a collection of a customer's note. The principle portion was $610 and the interest portion was $20. The interest had not been accrued.
Required
a. Prepare the June bank reconciliation for Chicago Scooter Company.
b. Prepare any necessary adjusting entries.
a.
CHICAGO SCOOTER COMPANY Bank Reconciliation June 30 | |||
---|---|---|---|
Cash Balance per Bank | $Answer | ||
Add: | AnswerReconciled Cash Balance per BankReconciled Cash Balance per BooksCollection of NoteDeposit in TransitNSF CheckOutstanding ChecksCheck Printing Charge | Answer | |
Less: | AnswerReconciled Cash Balance per BankReconciled Cash Balance per BooksCollection of NoteDeposit in TransitNSF CheckOutstanding ChecksCheck Printing Charge | Answer | |
AnswerReconciled Cash Balance per BankReconciled Cash Balance per BooksCollection of NoteDeposit in TransitNSF CheckOutstanding ChecksCheck Printing Charge | $Answer | ||
Cash Balance per Books | $Answer | ||
Add: | Accounts Payable Error | $Answer | |
Add: | AnswerReconciled Cash Balance per BankReconciled Cash Balance per BooksCollection of NoteDeposit in TransitNSF CheckOutstanding ChecksCheck Printing Charge | Answer | Answer |
Less: | AnswerReconciled Cash Balance per BankReconciled Cash Balance per BooksCollection of NoteDeposit in TransitNSF CheckOutstanding ChecksCheck Printing Charge | Answer | |
Less: | NSF Check | Answer | Answer |
AnswerReconciled Cash Balance per BankReconciled Cash Balance per BooksCollection of NoteDeposit in TransitNSF CheckOutstanding ChecksCheck Printing Charge | $Answer |
b.
GENERAL JOURNAL | ||||
---|---|---|---|---|
Date | Description | Debit | Credit | |
June | 30 | AnswerAccounts PayableAccounts ReceivableCashInterest EarnedMiscellaneous ExpenseNotes Receivable | $Answer | $Answer |
AnswerAccounts PayableAccounts ReceivableCashInterest EarnedMiscellaneous ExpenseNotes Receivable | Answer | Answer | ||
To correct check error in recording check No. 176. | ||||
30 | AnswerAccounts PayableAccounts ReceivableCashInterest EarnedMiscellaneous ExpenseNotes Receivable | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableCashInterest EarnedMiscellaneous ExpenseNotes Receivable | Answer | Answer | ||
Interest Earned | Answer | Answer | ||
To record note collection by bank. | ||||
30 | AnswerAccounts PayableAccounts ReceivableCashInterest EarnedMiscellaneous ExpenseNotes Receivable | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableCashInterest EarnedMiscellaneous ExpenseNotes Receivable | Answer | Answer | ||
To record check printing charge. | ||||
30 | AnswerAccounts PayableAccounts ReceivableCashInterest EarnedMiscellaneous ExpenseNotes Receivable | Answer | Answer | |
AnswerAccounts PayableAccounts ReceivableCashInterest EarnedMiscellaneous ExpenseNotes Receivable | Answer | Answer | ||
To record NSF check. |
____ 11. Which one of the following statements is incorrect?
a. | The accounting function should be separated from the custodianship of a company's assets. |
b. | Certain clerical personnel in a company should be rotated among various jobs. |
c. | The responsibility of receiving merchandise and paying for it usually should be given to one person. |
d. | A company's personnel should given well-defined responsibilities. |
____ 12. Which of the following is incorrect?
a. | The operating cycle always is one year in duration. |
b. | The operating cycle sometimes is longer than one year in duration. |
c. | The operating cycle sometimes is shorter than one year in duration. |
d. | The operating cycle is a concept applicable both to manufacturing and retailing enterprises. |
____ 13. When the allowance method of recognizing bad debt expense is used, the entry to record the write-off of a specific uncollectible account would decrease
a. | allowance for doubtful accounts. |
b. | net income. |
c. | net realizable value of accounts receivable. |
d. | working capital. |
____ 14. On January 1, 2014, Kyle Corporation established a petty cash fund of $400. On December 31, 2014, the petty cash fund was examined and found to have receipts and documents for miscellaneous expenses amounting to $364. In addition, there was cash amounting to $44. What entry would be required to record replenishment of the petty cash fund on December 31, 2014?
a. | Petty Cash.................... 364 Cash Short and Over......... 8 Cash........................ 356 |
b. | Miscellaneous Expense......... 364 Cash Short and Over......... 8 Petty Cash.................. 356 |
c. | Miscellaneous Expense......... 364 Cash Short and Over......... 8 Cash........................ 356 |
d. | Miscellaneous Expense......... 356 Cash Short and Over......... 8 Cash........................ 364 |
____ 15. In preparing a bank reconciliation, interest paid by the bank on the account is
a. | added to the bank balance. |
b. | subtracted from the bank balance. |
c. | added to the book balance. |
d. | subtracted from the book balance. |