True or False
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
True or False
Transcribed Image Text:11. A bank statement is prepared by the depositor to reconcile the difference between his
records and bank records.
12. A bank statement is a letter issued by the bank that certifies the existence of the bank
account.
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 of
the bank reconciliation.
Transcribed Image Text:4. In banking practice, a check becomes stale if not encashed within one year from the time of
issuance.
5. Deposits in transit refer to collections received on the last day of the month which are
deposited 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 the
depositor.
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 of
the depositor.
10. Adjusting journal entries are prepared based on the reconciling items on the bank side of
the bank reconciliation.
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