Week 1 Practice – Financial Accounting Fundamentals – Quiz

Financial Accounting Fundamentals, Week 1 Practice – Week 1 Quiz

The key terms in this Financial Accounting course include Financial Accounting Fundamentals – Week 1 Practice – Week 1 Quiz

---

Required information

 [The following information applies to the questions displayed below.]

Del Gato Clinic deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2017, its Cash account shows an $14,852 debit balance. Del Gato Clinic’s June 30 bank statement shows $15,351 on deposit in the bank.

1. Outstanding checks as of June 30 total $3,099.
2. The June 30 bank statement lists a $75 service charge.
3. Check No. 919, listed with the canceled checks, was correctly drawn for $389 in payment of a utility bill on June 15. Del Gato Clinic mistakenly recorded it with a debit to Utilities Expense and a credit to Cash in the amount of $398.
4. The June 30 cash receipts of $2,534 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement.

Exercise Bank reconciliation

Prepare a bank reconciliation for Del Gato Clinic using the above information:

DEL GATO CLINIC
Bank Reconciliation
June 30, 2017
Bank statement balance		$15,351	Book balance		$14,852
Add:			Add:
Deposit of June 30	$2,534		Error on Ck. No. 919	$9
		2,534			9
		17,885			14,861
Deduct:			Deduct:
Outstanding checks	3,099		Bank service charge	75
		3,099			75
Adjusted bank balance		$14,786	Adjusted book balance		$14,786

---

Financial Accounting Fundamentals – Week 1 Practice – Week 1 Quiz

---

Preparing a bank reconciliation and recording adjustments

[The following information applies to the questions displayed below.]

The following information is available to reconcile Branch Company’s book balance of cash with its bank statement cash balance as of July 31, 2017.

• a. On July 31, the company’s Cash account has a $25,642 debit balance, but its July bank statement shows a $26,679 cash balance.
• b. Check No. 3031 for $1,010 and Check No. 3040 for $497 were outstanding on the June 30 bank reconciliation. Check No. 3040 is listed with the July canceled checks, but Check No. 3031 is not. Also, Check No. 3065 for $281 and Check No. 3069 for $1,778, both written in July, are not among the canceled checks on the July 31 statement.
• c. In comparing the canceled checks on the bank statement with the entries in the accounting records, it is found that Check No. 3056 for July rent expense was correctly written and drawn for $1,290 but was erroneously entered in the accounting records as $1,280.
• d. The July bank statement shows the bank collected $10,000 cash on a noninterest-bearing note for Branch, deducted a $50 collection expense, and credited the remainder to its account. Branch had not recorded this event before receiving the statement.
• e. The bank statement shows an $805 charge for a $795 NSF check plus a $10 NSF charge. The check had been received from a customer, Evan Shaw. Branch has not yet recorded this check as NSF.
• f. The July statement shows a $15 bank service charge. It has not yet been recorded in miscellaneous expenses because no previous notification had been received.
• g. Branch’s July 31 daily cash receipts of $11,152 were placed in the bank’s night depository on that date but do not appear on the July 31 bank statement.

Part 2

2. Prepare the journal entries necessary to bring the company’s book balance of cash into conformity with the reconciled cash balance as of July 31, 2017. (If no entry is required for a transaction/event, select “No journal entry required” in the first account field.)
 

No	Transaction	General Journal	Debit	Credit
1	a.	No journal entry required
2	b.	No journal entry required
3	c.	Rent expense	10
		Cash		10
4	d.	Cash	9,950
		Collection expense	50
		Notes receivable		10,000
5	e.	Accounts receivable—E. Shaw	805
		Cash		805
6	f.	Miscellaneous expenses	15
		Cash		15
7	g.	No journal entry required

---