Bank Reconciliation (Practice Quiz) 1. Checks that have been written by a company but have not yet been charged to the company's checking account are referred to as checks. 2. A company's receipts from September 30 that get deposited to the company's bank account on October 1st are referred to as deposits as of September 30. 3. A general guide for reconciling the bank statement is "Put the item where it For items 1-15, select the action necessary to reconcile the bank statement Outstanding checks. a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance Bank service charge a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance Interest credited to bank account. a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance 7. Interest charged to bank account. a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance Deposit in transit a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance dj Deduct From BANK Balance Bank inadvertently charged your bank account for another company's bank fees. a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance 10. Bank erred by posting another company's credit memo to your company's bank account. a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance 11. Fee charged by bank for returned check. a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance 12. A company wrote a check for $76 and it cleared the bank for $76. However, the company recorded the check in its Cash account as $67. How is the difference of $9 handled on the bank reconciliation? a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance 13 14. A company had a receipt of $989 and correctly prepared its bank deposit slip for $989. However, the company recorded the receipt in its Cash account as $998. How is the difference of $9 handled on the bank reconciliation? a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance The bank collected a Note Receivable for the company and credited the company's bank account for $1,000 a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance 15. A company deposited a check from a customer into its checking account. A few days later the check was returned with the notation account closed and the bank deducted the amount on the bank statement a) Add To BOOK Balance b) Deduct From BOOK Balance c) Add To BANK Balance d) Deduct From BANK Balance 16. A company's Cash account has a balance of $851 as of October 31. The bank statement for this account reports a balance of $1,430 as of October 31. There are outstanding checks totaling $840 and a deposit in transit of $60. The bank statement shows interest earned of $19, service charges of $30, a customer's returned check of $100, and a check printing fee of $90. The reconciled Cash balance that should be reported on the company's balance sheet as of October 31 is $_ 17. Which of the following items will require a journal entry to the company's books? a) Bank Service Charge b) Deposit In Transit c) Bank Error 18. Which of the following will NOT require a journal entry to the company's books? a) Check Printing Charge b) Outstanding Checks c) Fee For NSF Check 19. A company recorded its check #2754 in its accounting records as $98. However, check #2754 was actually written for $89 and it cleared the bank as $89. What adjustment is needed to the Cash balance per books? a) Decrease By $9 b) Increase By $9 c) None Needed 20 A company recorded its August 15 receipts on its books as $165. However, the receipts were actually $156. The deposit slip for the bank was prepared correctly as $156. What adjustment is needed to the Cash balance per books? a) Decrease By $9 b) Increase By $9 C) None Needed Bank Reconciliation Problem Information from the records and bank statement of Matrix, Inc. as of July 31, 2020 is set forth below Cash balance per bank, July 31, 2020 $9,610 Cash balance per general ledger, July 31, 2020 7,430 Outstanding checks at July 31, 2020 2,417 Check mailed to the bank for deposit that had not reached the bank by July 31, 2018 500 NSF check (from customer for a payment on account) returned by bank July interest earned per bank statement Check no. 781 for supplies expense cleared the bank for $240, but was erroneously recorded in the books at $268 Deposit by Acme Company erroneously credited by the bank to our account 486 281 30 Required: Part A- Prepare the bank reconciliation for Matrix, Inc. Part B - Prepare any journal entries that should be made as a result of the bank reconciliation