Accounting: 9-4 Bank Reconciliation

What is the purpose of a bank statement?

• To list the company's annual profits

• To report monthly employee performance

• To outline all account transactions in a given month

• To provide a yearly summary of bank charges

Which of the following is NOT a primary component of a bank statement?

• Starting balance

• Cash deposits

• Annual interest rate

• Ending balance

What does a canceled check indicate?

• The check is ready to be used again

• The check has been lost

• The check has been processed and cleared

• The check has been voided by the bank

What is the main purpose of bank reconciliation?

• To calculate the company's annual interest

• To compare and reconcile the company’s cash records against the bank records

• To check for unauthorized transactions

• To apply for a loan

What type of adjustment is needed when the company has information the bank doesn't?

• Bank Adjustment

• Book Adjustment

• Interest Adjustment

• Fee Adjustment

What is a common reason for a bank and book balance to not agree?

• Deposits in Transit

• Incorrect account number

• Bankruptcy filing

• Annual audit discrepancies

What does an Outstanding Check represent?

• A check that has won an award

• A check that has not yet been deposited by the payee

• A check that has been canceled

• A check that has bounced due to insufficient funds

What adjustment is made for Interest Income not yet recorded in the books?

• Book Adjustment

• Bank Adjustment

• Deposit Adjustment

• Interest Rate Adjustment

What does NSF stand for?

• Non-Sufficient Funds

• Not So Fast

• National Science Foundation

• No Service Fee

After a bank reconciliation, what is the last step?

• Taking a break

• Recording the book adjustments in the accounting records

• Closing the bank account

• Applying for a new bank loan