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Bank Reconciliation and Proof of Cash
MULTIPLE CHOICES
1. In a bank reconciliation, deposits not recorded by the bank are:
a. added to the balance according to the bank statement
b. deducted from the balance according to the bank statement
c. added to the balance according to the depositor’s records
d. deducted from the balance according to the depositor’s records
2. These are deductions made by the bank to the depositor’s bank account but not yet recorded by the
depositor.
a. Credit memos (CM)
b. Debit memos (DM)
c. Outstanding checks (OC)
d. Deposits in transit (DIT)
3. Bank statements provide information about all of the following except
a. checks cleared during the period.
b. NSF checks.
c. bank charges for the period.
d. errors made by the company.
4. Accompanying the bank statement was a credit memorandum for a short-term, noninterest-bearing
note collected by the bank. What entry is required in the depositor’s accounts?
a. Debit Cash; credit Miscellaneous Income
b. Debit Cash; credit Notes Receivable
c. Debit Accounts Receivable; credit Cash
d. Debit Notes Receivable; credit Cash
5. In preparing its bank reconciliation on December 31, 20x1, Sun Co. has made available the following
data:
Balance per bank statement, 12/31/x1 38,075
Deposit in transit, 12/31/x1 5,200
Outstanding checks, 12/31/x1 6,750
Amount erroneously credited by the bank to Sun's
account, 12/28/x1 400
Bank service charges for December 75
Sun's adjusted cash in bank balance on December 31, 20x1 is
a. 36,125
b. 32,345
c. 23,410
d. 39,420
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6. In preparing its August 31, 20x3 bank reconciliation, Morning Co. has made available the following
information:
Balance per bank statement, 8/31/x3 18,050
Deposit in transit, 8/31/x3 3,250
Return of customer’s check for insufficient funds, 8/31/x3 600
Outstanding checks, 8/31/x3 2,750
Bank service charges for August 100
What is the correct cash balance of Morning on August 31, 20x3?
a. 15,550
b. 16,850
c. 17,650
d. 18,550
Use the following information for the next three questions:
The accounting records and bank statement of Entity A show the following information:
SUBSIDIARY LEDGER
CASH IN BANK - BPI CURRENT ACCOUNT
Date Description Debit Credit Balance
6/1 Bal. forwarded 881,000
6/11 Check #1113 130,800 750,200
6/15 Check #1114 220,000 530,200
6/16 Deposit 295,800 826,000
6/22 Deposit 670,000 1,496,000
6/24 Check #1115 80,000 1,416,000
6/28 Check #1116 380,000 1,036,000
6/29 Deposit 160,000 1,196,000
METROBANK
BANK STATEMENT - ENTITY A
Description Debit Credit Balance
Date
6/1 Bal. forwarded 881,000
6/10 Deposit 350,000 1,231,000
6/15 Payment 2,000 1,229,000
6/15 Check #1114 220,000 1,009,000
6/16 Deposit 295,800 1,304,800
6/20 Payment 50,000 1,254,800
6/22 Deposit 670,000 1,924,800
6/24 Check #1115 80,000 1,844,800
6/26 Check #1113 130,800 1,714,000
6/28 Deposit 410,000 2,124,000
Additional information:
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• The payments of ₱2,000 and ₱50,000 shown on the bank statement pertain to the cost of checkbook
requested from the bank and the monthly amortization of a bank loan, respectively. The loan
payment includes payment for interest of ₱8,000.
• Deposits shown on the bank statement but not on the cash ledger represent collections of accounts
receivable.
7. How much is the deposit in transit?
a. 160,000
b. 102,000
c. 52,000
d. 380,000
8. How much is the credit memo?
a. 52,000
b. 160,000
c. 760,000
d. 380,000
9. How much is the adjusted cash balance?
a. 1,940,000
b. 1,760,000
c. 1,380,000
d. 1,904,000
The next three items are based on the following information:
Taken from the records of Girly Co. are the following:
Balance per books, October 31 4,440
Total Credits per books, November 8,320
Balance per books, November 30 2,400
Balance per bank statement, October 31 5,520
Balance per bank statement, November 30 4,560
Total Debits per bank statement, November 2,800
Loan proceeds directly credited to Girly’s account in
October 1,200
Collection of receivable directly credited to Girly’s
account in November – not yet recorded in the books 600
NSF checks returned in October 900
NSF checks returned in November - not yet recorded in
the books 300
Check received from a customer amounting to ₱1,800
was recorded in the books in October as 180
Overstatement in book debit in October 800
Overstatement in book credit in November 300
Understatement in bank debit in October 290
Overstatement in bank credit in October 370
Deposit amounting to ₱1,050 was recorded by
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the bank in November as 150
Deposits in transit – October 31 4,500
Outstanding checks – October 31 3,800
10. How much are the deposits in transit on November 30?
a. 5,820 b. 6,190 c. 5,340 d. 6,920
11. How much are the outstanding checks on November 30?
a. 7,620 b. 8,680 c. 9,120 d. 8,280
12. How much is the adjusted balance of cash on November 30?
a. 3,000 b. 3,300 c. 2,400 d. 3,580
Use the following information for the next three questions:
Kriselda Co. has the following information for the months of June and July.
June 30 July 31
Book balance ? 9,300
Book debits 30,700
Book credits 27,000
Bank balance 10,200 16,800
Bank debits 21,300
Bank credits ?
Notes collected by bank 2,250 3,000
Bank service charge 20 100
NSF checks 880 1,400
Understatement of recorded cash
collections 1,900 1,200
Deposit in transit 6,000 11,250
Outstanding checks 9,750 17,850
Loan amortization of Kristeta
Corp. erroneously debited to
Kriselda Co.’s account 2,400 1,800
13. How much is the adjusted cash receipts in July?
a. 24,150 b. 27,900 c. 30,750 d. 24,350
14. How much is the adjusted cash disbursements in July?
a. 27,600 b. 27,900 c. 21,000 d. 21,600
15. How much is the adjusted cash balance as of July 31?
a. 12,000 b. 8,850 c. 15,930 d. 14,600
