Question
The following information is available for Birch Company at December 31: Money market fund balance $2,790 Certificate of deposit maturing June 30 of next year
- The following information is available for Birch Company at December 31:
Money market fund balance | $2,790 |
Certificate of deposit maturing June 30 of next year | $10,000 |
Postdated checks from customers | $1,475 |
Cash in bank account | $21,430 |
NSF checks from customers returned by bank | $650 |
Cash in petty cash fund | $200 |
Inventory of postage stamps | $24 |
U.S. Treasury bill purchased on December 15 and maturing on February 28 of following year | $5,000 |
Based on this information, Birch Company should report Cash and Cash Equivalents on December 31 of:
A) $29,420
B) $41,345
C) $31,345
D) $39,420
E) $38,770
2. Spencer Co. has a $200 petty cash fund. At the end of the first month the accumulated receipts represent $43 for delivery expenses, $127 for merchandise inventory, and $12 for miscellaneous expenses. The fund has a balance of $18. The journal entry to record the reimbursement of the account includes a:
A) Debit to Petty Cash for $200.
B) Debit to Cash Over and Short for $18.
C) Credit to Cash for $182.
D) Credit to Inventory for $127.
E) Credit to Cash Over and Short for $18.
3. If a check correctly written and paid by the bank for $749 is incorrectly recorded in the company's books for $794, how should this error be treated on the bank reconciliation?
A) Subtract $45 from the bank's balance.
B) Add $45 to the bank's balance.
C) Subtract $45 from the book balance.
D) Add $45 to the book balance.
E) Subtract $45 from the bank's balance and add $45 to the book's balance.
4. In the process of reconciling its bank statement for April, Donahue Enterprises' accountant compiles the following information:
Cash balance per company books on April 30 | $6,275 |
Deposits in transit at month-end | $1,300 |
Outstanding checks at month-end | $620 |
Bank charge for printing new checks | $45 |
Note receivable and interest collected by bank on Donahue's behalf | $770 |
A check paid to Donahue during the month by a customer is returned by the bank as NSF | $480 |
The adjusted cash balance per the books on April 30 is:
A) $6,900
B) $8,160
C) $4,600
D) $6,520
E) $5,840
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