13. In a company's bank reconciliation, an outstanding check is a check that:

Multiple Choice

• has been issued by the company but has not been presented to the bank for payment.

• is guaranteed for payment by the bank.

• has been presented to the bank for payment but has not been reported on the bank statement.

• has been written for an amount that is greater than the balance in the account holder's bank account.

14. The bank statement for Tetra Company contained the following items: a bank service charge of $10; a credit memo for interest earned, $15; and a $50 NSF check from a customer. The company had outstanding checks of $100 and a deposit in transit of $300.

The entry to record the customer's NSF check will:

Multiple Choice

• increase the Accounts Receivable balance.

• decrease the Cash account.

• decrease equity.

• increase the Accounts Receivable balance and decrease the Cash account balance.

15.The most favorable audit opinion that a company can receive is a(n):

Multiple Choice

• adverse opinion.

• unqualified opinion.

• disclaimer of opinion.

• qualified opinion.

16 An audit is useful to financial statement users because it:

Multiple Choice

• Guarantees that the financial statements are accurate and correct.

• Guarantees that management has not been involved in misappropriation of assets.

• Provides reasonable assurance that the financial statements do not have material misstatements.

• Assures users that confidentiality is maintained.

17. Which of the following is not a component of the fraud triangle?

Multiple Choice

• Reliance

• Rationalization

• Opportunity

• Pressure

18. Policies and procedures designed to reduce the opportunities for fraud are often called:

Multiple Choice

• Internal controls.

• Asset source transactions.

• Accounting standards.

• Financial systems.

19. The following information is available for Trinkle Company for the month of June:

1. The unadjusted balance per the bank statement on June 30 was $55,935.

2. Deposits in transit on June 30 were $2,520.

3. A debit memo was included with the bank statement for a service charge of $18.

4. A $5,413 check written in June had not been paid by the bank.

5. The bank statement included a $1,000 credit memo for the collection of a note. The principal of the note was $945, and the interest collected amounted to $55.

Required

Determine the true cash balance as of June 30. (Hint: It is not necessary to use all of the preceding items to determine the true balance.)