PART 1- TRUE OR FALSE1. The savings account earns minimal interest and may have a minimum balance requirement.2. The account holder may use the withdrawal slip to get money from his checking account.3. The account holder may issue a bank check from a savings account.4. In banking practice, a check becomes stale if not encashed within one year from the time ofissuance.5. Deposits in transit refer to collections received on the last day of the month which aredeposited the first working day of the following month.6. Deposit in transit is a reconciling item which requires an adjusting entry in the books of thedepositor.7. Bank service charge is an example of an unrecorded bank credit.8. Bank reconciliation is prepared once a year at the end of the accounting period.9. An NSF check is a reconciling item that does not require an adjusting entry in the books ofthe depositor.10. Adjusting journal entries are prepared based on the reconciling items on the bank side ofthe bank reconciliation.11. A bank statement is prepared by the depositor to reconcile the difference between hisrecords and bank records.12. A bank statement is a letter issued by the bank that certifies the existence of the bankaccount.13. Deposit in transit is a reconciling item added to the unadjusted book balance.14. Outstanding check is a reconciling item deducted from the unadjusted bank balance.15. Adjusting journal entries are prepared based on the reconciling items on the bank side ofthe bank reconciliation.

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Answered: PART 1- TRUE OR FALSE 1. The savings…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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PART 1- TRUE OR FALSE 1. The savings account earns minimal interest and may have a minimum balance requirement. 2. The account holder may use the withdrawal slip to get money from his checking account. 3. The account holder may issue a bank check from a savings account.