AKLAN STATE UNIVERISTY

School of Management School

Banga, Aklan
Arjay D. Villanueva
FINANCIAL ACCOUNTING BANK RECONCILIATION

1. A bank reconciliation is a statement which brings into agreement the cash balance per book and cash balance
per bank. If the balance shown on a company’s bank statement is less than the correct cash balance and neither
the company nor bank has made any errors, there must be
a. Outstanding checks
b. Deposit in transit
c. Bank charges not yet recorded by the company.
d. Deposits credited by the bank but not yet recorded by the company.

2. If the cash balance shown on a company’s accounting records is less the correct cash balance and neither the
company nor the bank has made any error, there must be.
a. Deposit in transit
b. Deposits credited by the bank but not yet recorded by the company.
c. Outstanding checks.
d. Bank charges not yet recorded by the company.

3. Which of the following statements regarding a certified check is false?

a. A certified check is a liability of the bank certifying it.
b. A certified check will be accepted by many persons who would not otherwise accepts a personal check.
c. A certified check is one drawn by the bank upon itself.
d. A certified check should not be included in the outstanding checks.

4. Which of the following reconciling items would require an adjusting journal entry on the company books?
a. Outstanding checks. c. Deposit in transit
b. Non-sufficient fund (NSF) d. Cash on hand

5. Which statement is correct?

a. Bank charge will cause balance per ledger to be lower than that recorded by the bank, all other things
being equal.
b. Outstanding check will cause the cash balance per ledger to be greater than the balance reported by the
bank, all other things being equal.
c. The amount shown in the balance sheet must also be the balance reported in the bank statement.
d. Deposit of another entity being credited to the account of the depositor is an error that does not require
an adjusting entry on the depositor’s books.

6. The following data are gathered from the records of Keima Company for the month of December 2015.
Balance per book 500,000
Balance per Bank 445,000
Deposit in transit 300,000
Outstanding check 85,000
Bank service charge for the month of December 5,000
Customer’s check returned by the bank marked “NSF” 50,000
Customer’s note collected by the bank Face 200,000; Interest 20,000; Collection
fee 5,000 215,000
How much is the adjusted cash balance?
a. 545,000 c. 705,000
b. 660,000 d. 715,000

7. In preparing its bank reconciliation at December 31, 2015, Ayumi Company has made available the following
data:
Balance per Bank Statement 1,500,000
Deposit in transit 200,000
Outstanding check 300,000
Amount erroneously credited by the bank to Ayumi’s Account 50,000
Bank service charge for December 5,000
Ayumi’s adjusted cash in bank balance at December 31, 2015 is.
a. 1,400,000 c. 1,350,000
b. 1,450,000 d. 1,345,000

8. In your audit of the Shiori Company as of December 31, 2015, you gather the following:
Balance per book 400,000
Bank charges 1,000
Outstanding checks 95,000
Deposit in transit 120,000
Customer note collected by the bank 150,000
Interest on customer note 6,000
Customer check returned “NSF” 25,000
Depositor’s note charged to account 100,000
The correct cash balance amounts to
a. 400,000 c. 430,000
b. 530,000 d. 425,000

9. Chihiro Company provided the following data for the purpose of reconciling the cash balance per book with the
balance per bank statement on December 31, 2015.
Balance per bank statement 200,000
Balance per book 85,000
Outstanding checks (including certified check of 10,000) 50,000
Deposit in transit 20,000
December NSF checks (of which 5,000 had been redeposited and cleared by
December 27) 15,000
Erroneous credit to Chihiro’s account representing proceeds of loan granted to
another company 30,000
Proceeds of note collected by bank for Chihiro, net of service charge of 2,000 75,000
The cash in bank to be shown on Chihiro’s December 31, 2015 statement of financial position is
a. 150,000 c. 180,000
b. 140,000 d. 145,000

10. Kanon Corporation keeps all its cash and checking account. An examination of the company’s accounting records
and bank statement for the month ended June 30, 2015 revealed the following information:
 The cash balance per book on June 30 is 8,500,000.
 A deposit of 1,000,000 that was placed in the bank’s night depository on June 30 does not appear on the
bank statement.
 The bank statement shows on June 30, the bank collected note for Kanon and credited the proceeds of
950,000 to the entity’s account.
 Checks outstanding on June 30 amount to 300,000.
 Kanon discovered that a check in June for 200,000 in payment of an accounts payable, had been recorded in
the entity’s record as 20,000.
 Included with the June bank statement was NSF check for 250,000 that Aries had received from a customer
on June 26.
 The bank statement shows a 20,000 service charge for June.
What amount should be reported as cash in bank on June 30?
a. 9,000,000 c. 9,360,000
b. 8,300,000 d. 9,180,000

11. Mio Company received the bank statement for the month of March. However, the closing balance of the
account was unreadable.
Attempts to contact the bank after hours did not secure the desire information.
February 28 book balance 1,460,000
Note collected by the bank 100,000
Interest earned on note 10,000
NSF check of customer 130,000
Bank service charge on NSF checks 2,000
Other bank charges 3,000
Outstanding check 202,000
Deposit of February 28 placed in night depository 85,000
Check issued by Mia Company charged to Mio’s account 20,000
 What is the cash balance per bank statement?
a. 1,435,000 c. 1,338,000
b. 1,532,000 d. 1,557,000

12. Haqua Company provided the following information at year-end.

Balance per Book 6,776,000
Balance per bank statement 6,532,000
Deposit in Bank closed by BSP 1,600,000
Deposit in Transit 1,234,000
Outstanding Checks 987,000
Currency and coin in hand 950,000
Petty cash fund including 10,000 paid voucher 50,000
Bank service charge not yet taken up in the book 6,000
Bond sinking fund 1,000,000
Error in recording a check in the book. The correct amount as paid by the bank
is 89,000 instead of 98,000 as recorded in the book or a difference of 9,000
What amount of cash should be reported as current assets at year-end?
a. 9,309,000 c. 7,769,000
b. 6,779,000 d. 8,769,000

13. Kasuga Company had the following bank reconciliation on June 30:
Balance per bank, June 30 3,000,000
Deposit in transit 400,000
Total 3,400,000
Outstanding checks (900,000)
Balance per book, June 30 2,500,000

The bank statement for the month of July showed the following:
Deposits, including 200,000 note collected for Kasuga 9,000,000
Disbursement, including 140,000 NSF customer check and 10,000 service
charge 7,000,000
All reconciling items on June 30 cleared through the bank in July. The outstanding checks totaled 600,000 and
the deposit in transit amounted to 1,000,000 on July 31.
What is the adjusted cash in bank on July 31?
a. 2,500,000 c. 2,900,000
b. 5,400,000 d. 5,000,000

14. What is the cash balance per book on July 31?

a. 5,400,000 c. 5,550,000
b. 5,350,000 d. 4,500,000

15. What is the amount of cash receipts per book in July?

a. 9,400,000 c. 8,600,000
b. 9,600,000 d. 9,800,000

16. What is the amount of cash disbursement per book in July?

a. 6,550,000 c. 7,300,000
b. 6,700,000 d. 6,850,000

17. Nagase Company prepared the following bank reconciliation on June 30:
Balance per bank, June 30 9,800,000
Deposit in transit 400,000
Total 10,200,000
Outstanding checks (1,400,000)
Balance per book, June 30 8,800,000

There were total deposits of 6,500,000 and charges for disbursements of 9,000,000 for July per bank statement.
All reconciliation items on June 30 cleared the bank on July 31. Check outstanding amounted to 1,000,000 and deposits
in transit totaled 1,200,000 on July 31.
 What is the amount of cash disbursement per book in July?
a. 8,600,000 c. 9,400,000
b. 7,600,000 d. 8,400,000

18. What is the adjusted cash in bank in July 31?

a. 7,300,000 c. 7,500,000
b. 6,300,000 d. 6,500,000

19. Tenri Company provided the following bank reconciliation on May 31:
Balance per bank statement 2,100,000
Deposit in transit 300,000
Total 2,400,000
Outstanding checks (30,000)
Correct Cash Balance 2,370,000

Balance per book 2,372,000

Bank service charge (2,000)
Correct Cash Balance 2,370,000

Bank Book
Checks recorded 2,300,000 2,360,000
Deposit recorded 1,620,000 1,800,000
Collection by Bank (400,000 note plus interest) 420,000 0
NSF check returned with June 30 statement 10,000 0
Balances 1,830,000 1,810,000

What is the amount of checks outstanding on June 30?

a. 30,000
b. 90,000
c. 60,000
d. 0

20. What amount of deposits in transit on June 30?

a. 480,000
b. 120,000
c. 180,000
d. 680,000

21. What is the adjusted cash in bank on June 30?

a. 1,810,000
b. 2,220,000
c. 2,240,000
d. 2,780,000