PROGRAM SMART ACCOUNTING SEMESTER 1 AA015 AMBILAN 2021

CHAPTER 6: ACCOUNTING FOR CASH

1. Which of the following items on a bank reconciliation would require an adjusting
entry on the company’s book?

A) An error by the bank.

B) Outstanding cheques.
C) A bank service charge.
D) A deposit in transit.

2. A company wrote a cheque for RM165 and it was cleared by the bank for RM165.
However, the company recorded the cheque in its Cash Account as RM156. How is
the difference of RM90 handled on the bank reconciliation?

A) Added RM90 to the cash book balance.

B) Deducted RM90 from the cash book balance.
C) Added RM90 to the bank balance.
D) Deducted RM90 from the bank balance.

3. The bank collected a payment of Notes Receivable for the company and credited the
company’s bank account for RM2,000. Choose the correct action that should be taken
while preparing the bank reconciliation.

A) Add RM2,000 to the cash book balance.

B) Deduct RM2,000 from cash book balance.
C) Add RM2,000 to the bank balance.
D) Deduct RM2,000 from bank balance.

4. A “NSF” cheque should appear in which section of the bank reconciliation?

A) Addition to the cash book balance.
B) Deduction from the cash book balance.
C) Addition to the bank balance.
D) Deduction from the bank balance.

5. A company recorded a receipt on its books as RM65. However, the receipts were
actually RM56. What adjustment is needed to the Cash balance per books?

A) Deduct RM9 from cash book balance.

B) Increase RM9 from cash book balance.
C) Deduct RM156 from cash book balance.
D) Increase RM156 from cash book balance.

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PROGRAM SMART ACCOUNTING SEMESTER 1 AA015 AMBILAN 2021

6. Which of the following would be added to the balance per bank on a bank
reconciliation?

A) Outstanding cheques.
B) Deposit in transit.
C) Notes collected by the bank.
D) Service charges by the bank.

7. For which of the following errors should an appropriate amount be added to the
balance per bank on a bank reconciliation?

A) Cheque for RM63 recorded by the company as RM36.

B) Deposit of RM500 recorded by the bank as RM50.
C) A returned RM200 cheque recorded by the bank as RM20.
D) Cheque for RM85 recorded by the company as RM58.

8. The bank shows a cash balance of RM17,300 while the company has a cash balance
of RM9,000. Using the following information, calculate the reconciled balance of
cash.

Bank Service Charge RM2,400

Deposits in Transit RM11,000
Notes Receivable collected by the
RM8,000
bank
Outstanding Cheque RM15,000
Non-sufficient funds (NSF) cheque RM1,300

A) RM13,300
B) RM28,300
C) RM28,600
D) RM9,300

9. In the process of reconciling Marriot Enterprises' bank statement for September, Mr.
Marriot compiles the following information:

Cash balance per company books on September 30 RM6,270

Deposits in transit at month-end RM1,310
Outstanding cheque at month-end RM630
Bank charges RM50
Notes receivable and interest collected by bank on Marriot'
RM760
behalf

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PROGRAM SMART ACCOUNTING SEMESTER 1 AA015 AMBILAN 2021

A cheque given to Marriot during the month by a customer is returned by the bank as
“NSF” RM490. The adjusted cash balance per the books on September 30 is:

A) RM6,490
B) RM6,980
C) RM4,550
D) RM8,150

10. On August 31, 2021 Dexter Company had this bank information: cash balance per bank
RM9,450; outstanding cheque RM762; deposits in transit RM1,700; and a bank service
charge RM20.
Determine the adjusted cash balance per bank at August 31, 2021

A) RM11,150
B) RM10,388
C) RM8,512
D) RM10,368

11. Bank sent the debit advice of RM500 to the company being interest of overdraft. It
wasn’t entered in the cash book. Identify the correct adjustment in the cash book.

A) RM500 added to the cash book balance.

B) RM500 deducted from cash book balance.
C) RM1,000 added in cash book balance.
D) Non-adjustable.

12. After checking a business cash book against the bank statement, which of the
following items could require an entry in the cash book?

(1) Bank charges

(2) A cheque from a customer which was dishonoured
(3) Cheque not presented
(4) Deposits not credited
(5) Credit transfer entered in bank statement
(6) Standing order entered in bank statement

A) 1,2,5 and 6
B) 3 and 4
C) 1,3,4 and 6
D) 3,4,5 and 6

13. In Bank Reconciliation Statement, when balance as per cash book is taken as the
starting point, then interest collected by the bank RM9,000 and direct deposit by a
customer into his bank RM18,000 will be:

A) Added in cash book balance.

B) Deducted from cash book balance.

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PROGRAM SMART ACCOUNTING SEMESTER 1 AA015 AMBILAN 2021

C) Added in bank balance.

D) Deducted from bank balance.

14. Lawrence Company gathered the following reconciling information in preparing its
October bank reconciliation:

Cash balance per books, October 31 RM16,800

Deposits in transit RM600
Notes receivable and interest collected by bank RM3,400
Bank charges RM80
Outstanding cheque RM8,000
“NSF” cheque RM680

The adjusted cash balance per books on October 31 is:

A) RM18,840
B) RM16,040
C) RM11,440
D) RM19,440

15. The cash records of the Billion Company show the following:

The July 31 bank reconciliation indicated that deposits in transit total RM390. During
August the general ledger account, Cash shows deposits of RM11,800, but the bank
statement indicates that only RM9,540 in deposits were received during the month.

What was the deposit-in-transit on August 31?

A) RM9,150
B) RM2,650
C) RM2,260
D) RM11,410