4.2.1/4.2.2 Proving cash and Reconciling Bank Statmnts ACNt1

When proving cash, cash balance is compared to _____.

• checkbook balance

• cash received

• cash paid

• bank balance

The first row of a bank statement shows:

• the account’s balance at the end of the period.

• the account’s balance at the beginning of the period.

• withdrawals that have decreased the account balance.

• deposits that have increased the balance.

A bank statement computes an account’s ending balance by adding all _____ to the beginning balance.

• amounts of canceled checks

• withdrawals and debits

• deposits and credits

• amounts of cash purchases

Which of the following would always be added to the bank balance while adjusting a bank balance during a reconciliation?

• bank errors

• outstanding checks

• returned checks

• deposits in transit

One example of a charge that may appear on a cash account but not on a bank statement is _____.

• an outstanding check

• an electronic funds transfer

• a bank collection

• a service charge

Pamela locates a check that has been written but that has not made it to the bank yet when conducting a bank reconciliation. This amount should be _____.

• added to the bank balance

• subtracted from the bank balance

• added to the book balance

• subtracted from the book balance

What is the first step in preparing a bank reconciliation?

• comparing the adjusted balances

• adjusting the balance per books

• adjusting the balance per bank

• preparing journal entries

Which type of transaction may either be added or subtracted while adjusting a bank balance?

• outstanding checks

• deposits in transit

• interest earned

• bank errors

How often should a business prove cash?

• ​as often as necessary

• ​only once a year

• only after a bank reconciliation

• ​only once a month

The first step of proving cash is to _____.

• ​calculate the checkbook balance

• ​calculate the cash balance

• ​reconcile a bank statement

• ​record the bank reconciliation