S SKANS School of Accountancy, Multan

Subject Code FA-1 (RECORDING FINANCIAL TRANSACTIONS) Batch: 86

Test Number 7 Test Duration: 50 MINS
Teacher Name: Muhammad Abdul Rehman Qureshi (FCCA) Total Marks: 50
Test Date: 19-03-2024 Test Time: 9:00 AM

QUESTION 1
Which would be the most viable payment method for a business to pay the rental
for its premises?
A. A. Bank draft
B. Standing order
C. EFTPOS
D. Offset of payments

QUESTION 2
Which of the following is a service generally offered by retail banks?
A. A. Disbursing a loan
B. Organising share issues
C. Advising mergers
D. Setting a country’s base interest rate

QUESTION 3
In an electronic payment clearing system, who is responsible for depositing
funds into the receiving bank?
A. A. The payer's bank
B. The originator of the payment
C. The recipient of the payment
D. The clearing house

QUESTION 4
Which scenario would cause a cheque to be dishonoured?
A. A. The payer does not have sufficient funds in their account
B. The date on the cheque is before the cheque is cashed.
C. The cheque is over one month old
D. The signature on the cheque matches the one on the bank’s file

QUESTION 5
Which statement about banking cheques and EFTPOS receipts is true?
A. The EFTPOS system holds the funds and only posts them to the holder's bank
account at the end of each year
B. Each cheque's drawer should be listed on paying-in slip
C. The EFTPOS system user must list the amount and customer name for each
credit card transaction
D. A stolen cheque will be honoured, provided the payee was not negligent
QUESTION 6
A business banks its cash receipts using a paying-in slip.
Which of the following is an appropriate security measure?
A. A. Ensure the same person always takes the cash to the bank
B. Ensure the time of day when cash is deposited at the bank is regular.
C. Complete and retain the element of the paying-in slip retained by the
customer
D. Allow access to the cash deposit records to all employees.

QUESTION 7
Which verification methods are used when the customer is online rather than in
the store with their card?
I. The customer enters a transaction code from an authorised device.
II. The customer calls the bank to perform phone verification.
III. The customer enters their CVV code (from the back of their card)
A. i) and ii) only
B. ii) and iii) only
C. i) and iii) only
D. i), ii) and iii)

QUESTION 8
A business receives a cheque from a customer to pay an invoice.
The invoice was for goods with a list price of $240. The business granted the customer
a trade discount of 10% and a settlement discount of 5%, which the customer took.
What amount should the business record in the bank ledger for this receipt?
A. A. $240.00
B. $205.20
C. $216.00
D. $228.00

QUESTION 9
A business has received a bank statement showing an overdraft of $3,765. There are
uncleared electronic transfer payments totalling $345 and uncleared lodgements of
$2,976.
What is the balance according to the cash book?
A. A. +$6,396
B. −$6,396
C. −$1,134
D. −$444
QUESTION 10
An accountant is undertaking a bank reconciliation.
Which reconciling item needs to be recorded in the cash ledger?
A. A. Uncleared lodgements
B. Bank charges
C. Unpresented cheques
D. Bank errors

QUESTION 11
Which item would be added to the bank statement balance to reconcile to the
cash book ledger?
A. A. Bank charges
B. Overdraft interest
C. Direct debits for utilities
D. Outstanding lodgements

QUESTION 12
The balance of the cash book is an overdraft of $765. The bookkeeper has identified an
error whereby a customer receipt of $78 was recorded twice. Additionally, uncleared
lodgements of $347 have been identified.
What should be the balance on the bank statement?
A. A. -$1,190
B. +$1,190
C. +$843
D. -$843

QUESTION 13
Which statement is true concerning bank reconciliations?
A. A. Reconciliations are only necessary to correct errors
B. Bank reconciliations incorporate adjustments for credit and debit notes
C. A company with a weak cash position should carry out more frequent
reconciliations
D. Reconciliations involve adjusting the cash ledger to match the bank statement
balance

QUESTION 14
The month-end cash ledger balance is $23,543. There are unpresented cheques of
$13,234, and bank charges are $50.
What is the bank balance per the bank statement?
A. A. $10,259
B. $36,727
C. $10,359
D. $36,827
QUESTION 15
Roomi has a bank statement showing an overdrawn balances of $300. The bank
general ledger account shows a balance in hand $ 25, interest charged was $30 which
had not been recorded in the bank general ledger account. There were no unpresented
cheques.
How much was a total undeposited cheques?
A. $245
B. $325
C. $295
D. $355

QUESTION 16
What is the impact of unpresented cheques on a company's financial statements?
A) They increase the balance in the company's bank statement.
B) They have no impact on the company's financial statements.
C) They decrease the balance in the company's cash book.
D) They increase the balance in the company's cash book.

QUESTION 17
The bank ledger of Sarah shows a credit balance of $2250. Cheque of $66 have been
written but not presented to bank, unclear lodgments amount to $97. The bank has
wrongly debited to Sarah account with interest of $70.
Direct debit of $600 has not been accounted for in the general ledger. What is the
balance on the bank statement?
A. $2951 CR
B. $2951 DR
C. $2811 DR
D. $2811 CR

QUESTION 18
A company’s bank ledger shows a credit balance of $677. The bank statement as
at the same date shows overdrawn balance of $766. Which one of the following
timing differences could account for the discrepancy?
A. Cheques drawn but not yet presented amounted to $89
B. Cheques received but not yet cleared amounted to $89
C. Cheques drawn but not yet presented amounted to $1443
D. Cheques received but not yet cleared amounted to $1443
QUESTION 19
The following bank reconciliation statement has been prepared for Mr. Khan by
junior clerk:
$
Over-drafter bank statement 178,100
Add: Deposits not credited 281,200
Less: Outstanding cheques 171,800
Overdraft per cash book 287,500
Which of the following should be the correct balance as per cash book?
A. $287,500 overdraft as stated.
B. $68,700 overdrawn.
C. $68,700 cash at bank.
D. $287,500 cash at bank

QUESTION 20
Ammarah’s bank statement shows a balance of $999 overdrawn; the statement includes
bank charges of $44 which have not entered in the cash book. There are also
unpresented cheques totaling $524 and lodgments not yet credited of $537. In addition,
the bank statement erroneously includes a dividend receipt of $15 belonging to another
customer. What is the correct bank balance to be shown in the SOFP at year end?
A. $971
B. $997
C. $1045
D. $1001

QUESTION 21
What is the typical validity period of a cheque from the date it is issued?
A. 3 months
B. 6 months
C. 12 months
D. 24 months

QUESTION 22
Which of the following best describes the purpose and use of a post-dated
cheque?
A. It is used as a standard cheque but with an extended validity period to facilitate
transactions that require delayed payment.
B. It is a financial instrument that allows the drawer to issue a cheque for a future
date, providing the payee with a deferred payment while ensuring the drawer's
account is not debited until the specified date.
C. It serves as a legally binding agreement for immediate fund transfer, with the
future date indicating the transaction record date rather than the actual fund
transfer date.
D. It is primarily used for back-dating financial transactions to accommodate
accounting adjustments, with the post-date signifying the original transaction
date.
QUESTION 23
Which statement accurately describes the nature and conditions of an overdraft
facility on a current account?
A. An overdraft facility allows account holders to withdraw funds beyond the account
balance without prior agreement, with interest applied only if the overdraft
exceeds a certain threshold.
B. An overdraft is an automatic feature of all current accounts, allowing unlimited
withdrawal of funds beyond the account's balance, with a standard interest rate
applied to the total account balance.
C. An overdraft facility, upon request and agreement, permits account holders to
withdraw funds up to a specified limit beyond the account balance, with the bank
typically charging interest on the overdrawn amount and possibly an
arrangement fee for the service.
D. An overdraft allows account holders to withdraw an unlimited amount of funds
beyond the account balance for a fixed period, after which the account is
automatically credited without any interest charges.
QUESTION 24
What is the implication of crossing a cheque?
A. Crossing a cheque means it can only be deposited directly into the bank account
of the payee, enhancing the security of the transaction by preventing
unauthorized cashing at the counter.
B. Crossing a cheque invalidates it, making it necessary for the issuer to write a
new cheque.
C. Crossing a cheque signifies that it is a post-dated cheque, and the funds will only
be available to the payee after the date written on the cheque.
D. Crossing a cheque doubles the validity period of the cheque from six months to
one year, providing more time for the payee to deposit or cash the cheque.
QUESTION 25
A business has a debit balance on its cash book of $1448.00 but the bank
statement shows a different balance. The following items have also been
discovered:
i. The bank statement shows that there were bank charges for the period of $100
which have not been recorded in the cash account;
ii. A standing order payment for $225 has also been mistakenly omitted from the
cash account;
iii. Cheques totaling $1215 had been written and posted to suppliers but had not yet
been presented;
iv. A cheque for $185 had been paid into the bank but was still outstanding.
v. Error in our cash ledger shows that we have not debited any amount for credit
sales of $111
What is the balance on the bank statement?
A. $1,123
B. $2,153
C. $93
D. $1,234