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10/12/2019 Chapter 6 - Multiple Choice - principlesofaccounting.

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Chapter 6 - Multiple Choice

Text (http://principlesofaccounting.com/chapter-6/)

Problems (http://principlesofaccounting.com/chapter-6/problems/)

Goals Achievement (http://principlesofaccounting.com/quizzes/chapter-6-goals-achievement/)

Fill in the Blanks (http://principlesofaccounting.com/quizzes/chapter-6- ll-in-the-blanks/)

Multiple Choice (http://principlesofaccounting.com/quizzes/chapter-6-multiple-choice/)

Glossary (http://principlesofaccounting.com/chapter-6/glossary/)

Results
 2 of 8 questions answered correctly

 Your time: 00:06:59

 You have reached 2 of 8 point(s), (25%)

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1. Question

The Cash account on the balance sheet should not include which of the following items

(http://principlesofaccounting.com/chapter-6/cash-composition/):

Travel advances to employees 


Currency 
Money orders

Deposits in transit

INCORRECT 
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10/12/2019 Chapter 6 - Multiple Choice - principlesofaccounting.com

a. Travel advances to employees are really a nontrade receivable — the employee either has to return the money

or provide an accounting to indicate how the money was spent. Currency and money orders are both cash
because they are acceptable to a bank for deposit and can be used to satisfy debts. Deposits in transit are cash;
the bank simply has not posted the deposit to a speci c account.

2. Question

A credit memorandum accompanying a bank statement would occur for which of the following items?
(http://principlesofaccounting.com/chapter-6/bank-reconciliation/)

A previously deposited customer check which was returned NSF.

Bank service charges for the month.

The proceeds of a note collected by the bank are deposited to the account. 
Each of the above.

CORRECT 

3. Question

When reconciling the ending cash balance per the bank statement to the correct adjusted cash balance, how would
deposits in transit be handled? (http://principlesofaccounting.com/chapter-6/bank-reconciliation/)

Added to the balance per the bank statement. 


Subtracted from the balance per the bank statement. 
Added to the balance per company records.

Ignored.

INCORRECT 

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10/12/2019 Chapter 6 - Multiple Choice - principlesofaccounting.com

a. Deposits in transit must be added to the balance per the bank statement. These are amounts of cash which
belong to the company, but which have not as yet been recorded by the bank. The balance per company records
should already include these amounts, so answer “c” is incorrect.

4. Question

A bank reconciliation sometimes points to the need for adjusting entries. In general, the source of the adjustments is:
(http://principlesofaccounting.com/chapter-6/bank-reconciliation/)

the reconciliation of the ending balance per the bank statement to the adjusted cash balance.

the reconciliation of the cash balance per the company records to the adjusted cash balance. 
both a and b. 
none of the above.

INCORRECT 
b. The cash balance per company records is the amount of cash in the general ledger account before the
reconciliation. The correct amount of cash actually possessed by the rm is the adjusted cash balance, per the
reconciliation. Logically, the reconciliation of the cash balance per company records to the correct amount of
cash points to the need for a journal entry to update the Cash account.

5. Question

Malory Company provides the following information about the month-end bank reconciliation:
(http://principlesofaccounting.com/chapter-6/bank-reconciliation/)

Ending cash per bank statement $1,367

Ending cash per company records 7,383


Monthly bank service charge 25
Deposits in transit at month-end 8,345
Outstanding checks at month-end 2,399
Customer check returned NSF 45
 

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The correct ending cash balance is:

$4,914 
$7,268

$7,313 
$7,383

INCORRECT 

6. Question

Malory Company provides the following information about the month-end bank reconciliation:
(http://principlesofaccounting.com/chapter-6/bank-reconciliation/)

Ending cash per bank statement $1,367


Ending cash per company records 7,383
Monthly bank service charge 25
Deposits in transit at month-end 8,345
Outstanding checks at month-end 2,399
Customer check returned NSF 45

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10/12/2019 Chapter 6 - Multiple Choice - principlesofaccounting.com

What journal entry should be recorded to cause the company records to be correct?

Cash      70

                        Cash Short & Over                        70


Miscellaneous Expense       70

                        Cash                         70

Miscellaneous Expense      25

Accounts Receivable      45

                        Cash                        70

Miscellaneous Expense      2,399

                        Cash                        2,399

INCORRECT 

7. Question

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10/12/2019 Chapter 6 - Multiple Choice - principlesofaccounting.com

When using a petty cash system, the replenishment of the fund would normally include a debit to:
(http://principlesofaccounting.com/chapter-6/petty-cash/)

Cash. 
Petty Cash.

Revenues.

None of the above. 

INCORRECT 
d. Various expense accounts are debited and Cash is credited.

8. Question

Short-term investments owned by a company are: (http://principlesofaccounting.com/chapter-6/trading-securities/)

reported on the balance sheet as a current asset. 


reported on the balance sheet as a noncurrent asset.

reported on the balance sheet as a contra-equity account.

reported on the balance sheet as a reduction of liabilities.

CORRECT 

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Additional Resources   

(//www.principlesofaccounting.com/illustrative-entries/)

  Illustrative Entries
   Examples of journal entries for numerous sample transactions

(//www.principlesofaccounting.com/illustrative-entries/)

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(//www.principlesofaccounting.com/illustrative-entries/)

(//www.principlesofaccounting.com/account-types/)

  Account Types
   Typical nancial statement accounts with debit/credit rules and disclosure conventions

(//www.principlesofaccounting.com/account-types/)

(//www.principlesofaccounting.com/account-types/)

(//www.principlesofaccounting.com/glossary/)

  Glossary
   Includes nancial and managerial terms

(//www.principlesofaccounting.com/glossary/)
(//www.principlesofaccounting.com/glossary/)

(//www.principlesofaccounting.com/time-value-money/)

  Time Value of Money


   Future and present value tables

(//www.principlesofaccounting.com/time-value-money/)

(//www.principlesofaccounting.com/time-value-money/)

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