AUDITING LL W/ CONNECT <C>
11th Edition
ISBN: 9781307416268
Author: MESSIER
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Question
Chapter 16, Problem 16.12MCQ
To determine
Introduction:
Bank transfer is one were money is sent from one bank to another. Bank transfer schedule is prepared which is used by the auditor to check existence of kites by a client. It lists details of all transfers that is to and from client’s account.
Check Kiting is checking whether amount received is disbursed on the same date or not in books and how many bank reconciliations are outstanding and deposit in transit to be reconciled with bank balances.
To select: The correct option.
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Required:1. Prepare a bank reconciliation as of February 28.2. Prepare adjusting entries for Valentine based on the information developed in the bank reconciliation.3. What is the amount of cash that should be reported on the February 28 balance sheet?
Bank reconciliation
2 On Oct. 31, 20x1, Dark Co.'s cash balance per recards is P7,540,
while the balance per bank statement is P8,510. The following
information is determined:
a. The bank statement reflects a P780 deposit that is not yet
recorded in the books. The deposit pertains to a collection
of note receivable with a principal balance of P700; the
difference represents the interest on the note,
b. The bank statement also reflects a P25 withdrawal
representing service charges for the month.
c Dark Co. erroneously recorded a check drawn for P140 as
P410. The check, which is payment for an account payable,
cleared the bank at the correct amount.
d. Dark Co. erroneously recorded a P910 collection of an
account receivable as Pl90. The bank statement reflects the
correct amount of deposit.
A PL,900 check deposit on Oct. 31 is not yet reflected in the
bank statement.
E The following checks drawn by Dark Co. are not yet
presented to the bank for payment: Check 075 for P325,
Check 080 for…
Complete parts d,e, and f
Chapter 16 Solutions
AUDITING LL W/ CONNECT <C>
Ch. 16 - Prob. 16.1RQCh. 16 - Prob. 16.2RQCh. 16 - Prob. 16.3RQCh. 16 - Prob. 16.4RQCh. 16 - Prob. 16.5RQCh. 16 - Prob. 16.6RQCh. 16 - Prob. 16.7RQCh. 16 - Prob. 16.8RQCh. 16 - Prob. 16.9RQCh. 16 - Prob. 16.10RQ
Ch. 16 - Prob. 16.11RQCh. 16 - Prob. 16.12MCQCh. 16 - Prob. 16.13MCQCh. 16 - Prob. 16.14MCQCh. 16 - Prob. 16.15MCQCh. 16 - Prob. 16.16MCQCh. 16 - Prob. 16.17MCQCh. 16 - Prob. 16.18MCQCh. 16 - Prob. 16.19MCQCh. 16 - Prob. 16.20MCQCh. 16 - Prob. 16.21MCQCh. 16 - Prob. 16.22MCQCh. 16 - Prob. 16.23MCQCh. 16 - Prob. 16.24PCh. 16 - Prob. 16.25PCh. 16 - Prob. 16.26PCh. 16 - Prob. 16.27PCh. 16 - Prob. 16.28PCh. 16 - Prob. 16.29PCh. 16 - Prob. 16.30P
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- Using the following information, prepare a bank reconciliation. Bank balance: $4,587 Book balance: $5,577 Deposits in transit: $1,546 Outstanding checks: $956 Interest income: $56 NSF check: $456arrow_forwardThe bank reconciliation revealed that one deposit had cleared the bank two weeks after the date of the deposit. Should this be of concern? Why, or why not?arrow_forwardHajun Company received the following bank statement. Using the information from PB9 and PB10, prepare the bank reconciliation.arrow_forward
- Inner Resources Company received the following bank statement. Using the information from PA11 and PA12, prepare the bank reconciliation.arrow_forwardThe bank reconciliation shows the following adjustments. Deposits in transit: $526 Outstanding checks: $328 Bank charges: $55 NSF checks: $69 Prepare the correcting journal entry.arrow_forwardBased on the following data, prepare a bank reconciliation for December of the current year: a. Balance according to the bank statement at December 31, $283,000.b. Balance according to the ledger at December 31, $245,410.c. Checks outstanding at December 31, $68,540.d. Deposit in transit, not recorded by bank, $29,500.e. Bank debit memo for service charges, $750.f. A check for $12,700 in payment of an invoice was incorrectly recorded in the accounts as $12,000. Kornett CompanyBank ReconciliationDecember 31, 20Y8 choices: Bank svc chg; Cash balance according to bank stmt; Cash balance according to company's stmt; Cash; Petty cash $ choices: Add error in recording check; Add deposit in transit-not recorded by bank; Deduct error in recording check; Deduct deposit in transit-not recv'd by bank; Deduct bank svc chg choices: Add error in recording check; Add outstanding checks; Add bank svc chg; Deduct bank svc chg; Deduct outstanding checks Adjusted balance $…arrow_forward
- For each of the items in the following list, identify where it is included on a bank reconciliation: 1. EFT payment made by a customer. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. Bank debit memorandum for service charges. Outstanding cheques from the current month. Bank error in recording a $1,779 deposit as $1,977. Outstanding cheques from the previous month that are still outstanding. Outstanding cheques from the previous month that are no longer outstanding. Bank error in recording a company cheque made out for $160 as $610. Bank credit memorandum for interest revenue. Company error in recording a deposit of $160 as $1,600. Bank debit memorandum for a customer's NSF cheque. Deposit in transit from the current month. Company error in recording a cheque made out for $630 as $360.arrow_forwardPrepare the bank reconciliation for april and the journal entries that should be made as a result of the bank reconciliation. What should the cash account be after recording the journal entries?arrow_forwardWhat is the total outstanding checks on December?arrow_forward
- Following is the general format of a four-column bank reconciliation with the various categories and presentation numbered (1) through (8): Balance 10/31 November November Receipts Disbursements Balance 11/30 SXXXXX 3 Per Bank Statement Items to be added. Items to be deducted: Per Books SXXXXX 1. $XXXXX SXXXXX 7. SXXXXX SXXXXX SXXXXX SXXXXX Indicate the proper location for the following reconciling items. Assume the books record NSF checks as disbursements. A 10/31 NSF check will appear as: Select one: O a.1 and 5 O b.2 and 5 O cl and 4 O d. 2 and 3 O e. 2 and 6arrow_forwardFollowing is the general format of a four-column bank reconciliation with the various categories and presentation numbered (1) through (8): November Receipts Balance November Balance 10/31 Disbursements 11/30 Per Bank Statement Items to be added Items to be deducted: Per Books $XXXXX SXXXXX 3 $XXXXX $XXXXX 7 1 2 SXXXXX 6. SXXXXX SXXXXX 8 SXXXXX Indicate the proper location for the following reconciling items. A customer check received by the company in October was erroneously recorded twice by the books. The books were corrected in November by recording a negative receipt. This item will appear as: Select one: O a. 2 and 3 O b.3 and 7 O c.4 and 8 O d. 1 and 4 O e. 1 and 7arrow_forward25. Stellar Company provided the bank statement for the month of December which included the following information: Ending balance, December 31 Bank service charge for December Interest paid by bank to Stellar Company for December In comparing the bank statement to its own cash records, the entity found the following Deposit made but not yet recorded by the bank Checks written and mailed but not yet recorded by the bank In addition, the entity discovered that it had draw and eroneously recorded a check for P46,00 that should have been recorded for P64,000, What is the cash balance per ledger on December 31? 2,800,000 12,000 10,000 350,00 650,000arrow_forward
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