1.
Using the code letters below, indicate how each of the items listed would be handled in preparing a bank reconciliation.
| 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 | BDCEA | ||||||||||||||||||||||||||||||||
| 2. | Bank service charge | DEBAC | ||||||||||||||||||||||||||||||||
| 3. | Check for $320 correctly written and paid by the bank but incorrectly entered in the cash payments journal for $230 | DEBAC | ||||||||||||||||||||||||||||||||
| 4. | Deposit in transit | BCDAE | ||||||||||||||||||||||||||||||||
| 5. | Bank returns customer deposited check marked NSF | ABDCE | ||||||||||||||||||||||||||||||||
| 6. | Bank collects notes receivable and interest for depositor | EADBC | ||||||||||||||||||||||||||||||||
| 7. | Bank debit memorandum for check printing fees | ECDAB | ||||||||||||||||||||||||||||||||
| 8. | Petty cash custodian has $86 in paid petty cash vouchers that have not been reimbursed. | EABCD | ||||||||||||||||||||||||||||||||
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9. 10 |
Bank charged a check against the company, which should have been charged to another company. A check for $236 was correctly paid by the bank but was incorrectly entered in the cash payments journal for $263 |
EBACD | ||||||||||||||||||||||||||||||||
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2. The expense recognition principle relates to credit losses by stating that bad debt expense should be recorded
3. The maturity value of a $40,000, 12%, 3-month note receivable is
4. Which of the following companies would most likely have the highest inventory turnover?
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