1. When a bank debits your account, it is decreasing the balance. true or false

2. A deposit received by the bank will include

a. a credit to the company's bank account.

b. no increase or decrease is made to the company's bank account.

c. a credit to the cash account on the company's books.

d. a debit to the company's bank account.

3. When a company transfers funds among parties electronically, without the use of paper cheques it is called

a. e-commerce.

b. automated reconciliation.

c. electronic funds transfer.

d. cheque truncation

4. Advantages of online banking include

a. convenience.

b. transaction speed.

c. effectiveness.

d. All of the above are correct.

5. SWIFT codes are used for

a. identifying a particular branch of a bank worldwide.

b. identifying a payee in another country.

c. speeding up deposits.

d. making certain any cheques written are cleared as soon as possible.

6. The bank statement shows

a. have not been presented to the bank for payment and have not been subtracted from the company's ledger account.

b. have been returned to the business for nonpayment.

c. have not been presented to the bank for payment but have been subtracted in the ledger account.

d. have been subtracted on the bank records but not the chequebook records.

7. A nonsufficient funds cheque was returned to your company. How does the bank treat this on your bank statement?

a. It is added to the bank balance.

b. It is shown as a credit memo.

c. It is shown as a debit memo.

d. None of these answers are correct.

8. Information to calculate the adjusted cash balance for Everest Climbing Gear is as follows:

Cash balance per general ledger $4,000

Customer's cheque returned--NSF 150

Bank service charges 80

Deposits in transit 1,000

Outstanding cheques 1,400

Customer's note collected by bank 1,290

9. The May bank statement for Accounting Services shows a balance of $6,300, but the balance per books shows a cash balance of $7,980. Other information includes

1. A cheque for $200 to pay the electric bill was recorded on the books as $20.

2. Included on the bank statement was a note collected by the bank for $300 plus interest of $30.

3. Cheques outstanding totaled $360.

4. Bank service charges were $50.

5. Deposits in transit were $2,140.

Which item(s) should be subtracted from the balance per books?

a. Bank service charge

b. None of the above are correct.

c. Bank service charge and the note collected by the bank

d. Cheques outstanding and bank service charge

6. A payment for $49 is incorrectly recorded in the accounting records as $94. The $45 error should be shown on the bank reconciliation as

a. deducted from the balance per bank statement.

b. added to the balance per books.

c. added to the balance per bank statement.

d. deducted from the balance per books.