College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
22nd Edition
ISBN: 9781305666160
Author: James A. Heintz, Robert W. Parry
Publisher: Cengage Learning
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Question
Chapter 7, Problem 1TF
To determine
Identify whether the given statement is true or false.
Expert Solution & Answer
Answer to Problem 1TF
False statement
Explanation of Solution
Bank reconciliation:
Bank statement is prepared by bank. The company maintains its own records from its perspective. This is why the cash balance per bank and cash balance per books seldom agree. Bank reconciliation is the statement prepared by company to remove the differences and disagreement between cash balance per bank and cash balance per books.
The main purpose of the
Therefore, the given statement “The primary purpose of bank reconciliation is to detect and correct errors made by the bank in its records” is false.
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Chapter 7 Solutions
College Accounting, Chapters 1-27 (New in Accounting from Heintz and Parry)
Ch. 7 - Prob. 1TFCh. 7 - Prob. 2TFCh. 7 - Prob. 3TFCh. 7 - Prob. 4TFCh. 7 - Prob. 5TFCh. 7 - Prob. 1MCCh. 7 - Prob. 2MCCh. 7 - Prob. 3MCCh. 7 - Prob. 4MCCh. 7 - When the cash short and over account has a debit...
Ch. 7 - Match the following words with their definitions...Ch. 7 - Prob. 2CECh. 7 - Prob. 3CECh. 7 - Prob. 4CECh. 7 - Why must a signature card be filled out and signed...Ch. 7 - Prob. 2RQCh. 7 - Prob. 3RQCh. 7 - Prob. 4RQCh. 7 - What are the most common reasons for differences...Ch. 7 - Prob. 6RQCh. 7 - Prob. 7RQCh. 7 - Name five common uses of electronic funds...Ch. 7 - Prob. 9RQCh. 7 - What should be prepared every time a petty cash...Ch. 7 - At what two times should the petty cash fund be...Ch. 7 - Prob. 12RQCh. 7 - At what two times would an entry be made affecting...Ch. 7 - What does a debit balance in the cash short and...Ch. 7 - CHECKING ACCOUNT TERMS Match the following words...Ch. 7 - Prob. 2SEACh. 7 - Prob. 3SEACh. 7 - Prob. 4SEACh. 7 - Prob. 5SEACh. 7 - Prob. 6SEACh. 7 - CASH SHORT AND OVER ENTRIES Based on the following...Ch. 7 - Prob. 8SPACh. 7 - Prob. 9SPACh. 7 - Prob. 10SPACh. 7 - Prob. 11SPACh. 7 - CHECKING ACCOUNT TERMS Match the following words...Ch. 7 - Prob. 2SEBCh. 7 - Prob. 3SEBCh. 7 - Prob. 4SEBCh. 7 - Prob. 5SEBCh. 7 - Prob. 6SEBCh. 7 - CASH SHORT AND OVER ENTRIES Based on the following...Ch. 7 - Prob. 8SPBCh. 7 - Prob. 9SPBCh. 7 - Prob. 10SPBCh. 7 - CASH SHORT AND OVER ENTRIES Listed below are the...Ch. 7 - Prob. 1MYWCh. 7 - Prob. 1MPCh. 7 - Prob. 1CP
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- When preparing a bank reconciliation, adjustments are made to the bank side and not the ledger (book) side. True or Falsearrow_forwardThe bank reconciliation can be used to control cash in a bank account. A) True B) Falsearrow_forwardPreparing the bank recociliation is consifered to be an important step in interna; control process for cash, as there is difference between depositers' accounting records and the bank statement. Explain the causes of discrepancies for this situatuon with specific example for each cause,arrow_forward
- When preparing a bank reconciliation, if the adjusted book balance and the adjusted bank balance are equal, then there is no need to have an external auditor test internal controls for the "cash" account. True or Falsearrow_forwardWhen preparing bank reconciliation, deposits in transit will:A. Increase the balance per depositor's records.B. Decrease the balance per depositor's records.C. Increase the balance per the bank statement.D. Decrease the balance per the bank statement.arrow_forwardIn a two-step bank reconciliation, identify the items that might be necessary to adjust the bank balance to the corrected cash balance. Identify the items that might be necessary to adjust the book balance to the corrected cash balance.arrow_forward
- Explainarrow_forwardThe amount of the outstanding checks is included on the bank reconciliation as a(n)arrow_forwardBank confirmations are critical to the cash audit. What information does the auditor obtain by sending bank confirmations? Explain the different types of bank confirmations and what assertions each type addresses. How is it determined which is the best bank confirmation type to use?arrow_forward
- Another way to describe account reconciliation is bank reconciliation—the process of bringing the balance of the bank statement and the balance of the cash account into agreement. True Falsearrow_forwardBank confirmations are critical to the cash audit. What information does the auditor obtain by sending bank confirmations? Explain the different types of bank confirmations and what assertions each type addresses. How do you determine which is the best bank confirmation type to use?arrow_forwardAfter preparing a bank reconciliation, what adjustments does the company need to make to its records?arrow_forward
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