Accounting questions that will be helpful for students

Nobel College

Sinamangal, Kathmandu

End Chapter Quizzes

Full Marks: 10                                                                                     Time: ½ Hours

Pass Mark:    5                                                                                    

Name:      _________________________

Roll. No   ____________

Attempt all the questions.

Q.N. 1) XON's bank mistakenly credited XON's checking account for a customer check that should have deposited in XOM's account. The error was discovered when the accountant for XON was analyzing the bank statement. Therefore:

A.    The bank should reduce its deposit liability to XOM.

B.     The bank should reduce its deposit liability to XON.

C.     The mistake will have no effect on XON's bank reconciliation for the period.

D.    The "book" side of XON's reconciliation will show an adjustment.

Q.N.2) A common format for the monthly bank reconciliation features two columns, one starting with the balance per bank (from the statement), and the other starting with the balance per the ledger (books). Check the item(s) that would cause an adjustment to be made to the balance per bank, in the bank side of the reconciliation.

A.    service charges

B.     NSF check

C.     undeposited customer checks

D. error in the balance per the bank statement

Q.N. 3. Total sales for the year are $40,000. This amount includes cash sales of $6,000. The beginning and ending balances of accounts receivable are $10,000 and $15,000 respectively. The total amount of cash received from customers during the year equals $ __________.

Q.N. 4.            If the credit balance in allowance for doubtful debt account is existed is Rs. 2,500 and the new estimation is required Rs. 3,500 as a result of which the allowance for doubtful debt account is credited by  Rs. ------------------------

Q.N. 5. The interest bearing notes represents the interest as annual percentage but the non-interest bearing notes do not express as an annual percentage even though ___________interest rate is high.

QN.7. The last in first out method of inventory valuation is appropriate if the price of product is in decreasing trend to fulfill the __________________purpose of the company.

Q. N. 8. The separate account, which is maintained to record the return outward under periodic inventory system is______________________

Q.N. 9. ____________________Method assumes that the price of the products is homogeneous.

Q.N. 10. Gross profit method of inventory estimation is used to identify the ___________________.

*********************************The End********************************

Q.n. 1) The process of preparing the bank reconciliation culminates in recording adjusting journal entries which involve cash-one of the few instances in which cash is affected by an adjusting entry. Which of the following would cause an adjusting journal entry to be recorded as a result of preparing the bank reconciliation?

A.    deposits in transit

B.     bank service charges

C.     outstanding checks

D.    checks clearing the bank returned with the statement

Q.n. 2) A common format for the monthly bank reconciliation features two columns, one starting with the balance per bank (from the bank statement), and the other starting with the balance per the ledger (books). Which of the following is not an adjustment to the balance per books, but rather is an adjustment to the balance per bank?

A.    bank service charges

B.     outstanding checks

C.     error by the company in recording a deposit

D.    NSF check

Q.n 3) Firms that receive significant sums of cash each day from customers are well-advised to make daily deposits to control and safeguard cash. Deposits in transit are a frequent occurrence. Choose the correct statement about a deposit in transit.

A.    It is not included in cash until it reaches the bank.

B.     It is added to the balance per books in a bank reconciliation.

C.     It is added to the balance per bank in a bank reconciliation.

D.    It is not recorded by the depositor until it is listed in the bank statement.

Q.n.5) Among the accounts in the balance sheet, cash is unique. Check the attribute(s) of cash below that describe the amount of cash reported in the balance sheet.

A.    book value

B.      market value

C.     nominal value

D.    present value

Q.n.6) When cash is reported in the balance sheet, more than one item may be included in the account balance. Check the item(s) that would be included in a firm's reported cash balance at the end of a fiscal year.

A.    US currency and coins

B.     foreign currency and coins

C.     advances to employees and unused postage stamps

D.    checking accounts

D.     

Q.n. 7) Bank reconciliations are part of the overall system of internal controls of the firm. Check the reason(s) for reconciling the bank account:

A.    to assist in identifying the components of the cash account

B.     to provide information for adjusting entries involving cash

C.     to identify errors in recording cash

D.    to assist in determining the correct ending cash balance

14. The internal control system for cash is designed to ensure compliance with company policy, protect cash, and guarantee that an adequate accounting system is in place. Check the characteristic(s) that would be beneficial to include in an internal control system for cash.

A. use of bank reconciliations
B. use of petty cash funds for frequent small cash disbursements
C. separation of cash custody, recording of cash, and authorization for cash disbursements
D. use of computer systems which place several asset handling and recording duties under the control of one person for efficiency

15.       In March, Ana-log Inc. is notified by its bank that a customer check is NSF (nonsufficient funds). This check was collected from a customer on a credit sale made by Ana-log the previous month. Ana-log included the NSF check in its March bank reconciliation. The resulting adjusting entry includes a debit to _________.

16.              In April, a firm wrote a check for $620 in payment of a purchase made in March. $620 is the correct amount but the firm recorded the payment for $260 in the journal entry. The check cleared the bank in April and was returned, along with all the other cleared checks, with the April bank statement. The required adjusting entry will reduce ________ $360.

17.              16. In April, a firm wrote a check for $620 in payment of a purchase made in March. $620 is the correct amount but the firm recorded the payment for $260 in the journal entry. The check cleared the bank in April and was returned, along with all the other cleared checks, with the April bank statement. The required adjusting entry will reduce ________ $360.

18.       The bank reconciliation for the current month listed 3 adjustments in the "balance per books" column, and 4 adjustments in the "balance per bank" column. The company makes separate adjusting entries for each adjustment. Therefore, the number of adjusting entries that will be made is ________.

19.       Firms that require employees to receive and disburse currency and coin for routine business purposes usually maintain a petty cash fund. For a firm that has several different branch offices or manufacturing facilities, the total amount of petty cash can be significant. The petty cash fund for a firm at one of its locations was started by placing $500 into a locked box under the control of a custodian. At the end of the first month, $75 remained in the box. The slips authorizing and explaining the purpose for each employee expenditure were maintained in a separate compartment not accessible by the custodian. These slips replace the cash disbursed. When the petty cash fund is replenished, the journal entry will include a credit to ________ of $425.

20.       The accountant included each of the following items in the cash account at the end of the current year. These eight items total $18,300.

    Cash on hand                    $5,000

    Checking account balance         2,000

    Undeposited customer checks      1,000

    Post dated customer check          800

    Petty cash box                     500*

    Money order from customer          900

    Certificate of deposit           8,000

    Cashier's check from customer      100              

    * not included in the cash on hand amount

The accountant did not include the following items in the cash account:

    Cash sinking fund account        $4,000

    (for bond retirement six years

     from balance sheet date)

    Foreign currency holdings         1,200

    (US dollar equivalent at the

     balance sheet date)

The amount to be reported in the balance sheet for cash is $ __________.

The process of preparing the bank reconciliation culminates in recording adjusting journal entries which involve cash-one of the few instances in which cash is affected by an adjusting entry. Which of the following would cause an adjusting journal entry to be recorded as a result of preparing the bank reconciliation?

A. deposits in transit
B. bank service charges
C. outstanding checks
D. checks clearing the bank returned with the statement

7.         A common format for the monthly bank reconciliation features two columns, one starting with the balance per bank (from the bank statement), and the other starting with the balance per the ledger (books). Which of the following is not an adjustment to the balance per books, but rather is an adjustment to the balance per bank?

A. bank service charges
B. outstanding checks
C. error by the company in recording a deposit
D. NSF check

8.         Firms that receive significant sums of cash each day from customers are well-advised to make daily deposits to control and safeguard cash. Deposits in transit are a frequent occurrence. Choose the correct statement about a deposit in transit.

A. It is not included in cash until it reaches the bank.
B. It is added to the balance per books in a bank reconciliation.
C. It is added to the balance per bank in a bank reconciliation.
D. It is not recorded by the depositor until it is listed in the bank statement.

9.         XON's bank mistakenly credited XON's checking account for a customer check that should have deposited in XOM's account. The error was discovered when the accountant for XON was analyzing the bank statement. Therefore:

A. The bank should reduce its deposit liability to XOM.
B. The bank should reduce its deposit liability to XON.
C. The mistake will have no effect on XON's bank reconciliation for the period.
D. The "book" side of XON's reconciliation will show an adjustment.

10.       Among the accounts in the balance sheet, cash is unique. Check the attribute(s) of cash below that describe the amount of cash reported in the balance sheet.

A. book value
B. market value
C. nominal value
D. present value

11.       When cash is reported in the balance sheet, more than one item may be included in the account balance. Check the item(s) that would be included in a firm's reported cash balance at the end of a fiscal year.

A. US currency and coins
B. foreign currency and coins
 advances to employees and unused postage stamps
D. checking accounts

12.       A common format for the monthly bank reconciliation features two columns, one starting with the balance per bank (from the statement), and the other starting with the balance per the ledger (books). Check the item(s) that would cause an adjustment to be made to the balance per bank, in the bank side of the reconciliation.

A. service charges
B. NSF check
C. undeposited customer checks
D. error in the balance per the bank statement

13.       Bank reconciliations are part of the overall system of internal controls of the firm. Check the reason(s) for reconciling the bank account:

A. to assist in identifying the components of the cash account
B. to provide information for adjusting entries involving cash
C. to identify errors in recording cash
D. to assist in determining the correct ending cash balance

14.       The internal control system for cash is designed to ensure compliance with company policy, protect cash, and guarantee that an adequate accounting system is in place. Check the characteristic(s) that would be beneficial to include in an internal control system for cash.

A. use of bank reconciliations
B. use of petty cash funds for frequent small cash disbursements
C. separation of cash custody, recording of cash, and authorization for cash disbursements
D. use of computer systems which place several asset handling and recording duties under the control of one person for efficiency

15.       In March, Ana-log Inc. is notified by its bank that a customer check is NSF (nonsufficient funds). This check was collected from a customer on a credit sale made by Ana-log the previous month. Ana-log included the NSF check in its March bank reconciliation. The resulting adjusting entry includes a debit to _________.

16.       In April, a firm wrote a check for $620 in payment of a purchase made in March. $620 is the correct amount but the firm recorded the payment for $260 in the journal entry. The check cleared the bank in April and was returned, along with all the other cleared checks, with the April bank statement. The required adjusting entry will reduce ________ $360.

17.       Total sales for the year are $40,000. This amount includes cash sales of $6,000. The beginning and ending balances of accounts receivable are $10,000 and $15,000 respectively. The total amount of cash received from customers during the year equals $ __________.

18.       The bank reconciliation for the current month listed 3 adjustments in the "balance per books" column, and 4 adjustments in the "balance per bank" column. The company makes separate adjusting entries for each adjustment. Therefore, the number of adjusting entries that will be made is ________.

19.       Firms that require employees to receive and disburse currency and coin for routine business purposes usually maintain a petty cash fund. For a firm that has several different branch offices or manufacturing facilities, the total amount of petty cash can be significant. The petty cash fund for a firm at one of its locations was started by placing $500 into a locked box under the control of a custodian. At the end of the first month, $75 remained in the box. The slips authorizing and explaining the purpose for each employee expenditure were maintained in a separate compartment not accessible by the custodian. These slips replace the cash disbursed. When the petty cash fund is replenished, the journal entry will include a credit to ________ of $425.

20.       The accountant included each of the following items in the cash account at the end of the current year. These eight items total $18,300.

    Cash on hand                    $5,000

    Checking account balance         2,000

    Undeposited customer checks      1,000

    Post dated customer check          800

    Petty cash box                     500*

    Money order from customer          900

    Certificate of deposit           8,000

    Cashier's check from customer      100              

    * not included in the cash on hand amount

The accountant did not include the following items in the cash account:

    Cash sinking fund account        $4,000

    (for bond retirement six years

     from balance sheet date)

    Foreign currency holdings         1,200

    (US dollar equivalent at the

     balance sheet date)

The amount to be reported in the balance sheet for cash is $ __________.

The process of preparing the bank reconciliation culminates in recording adjusting journal entries which involve cash-one of the few instances in which cash is affected by an adjusting entry. Which of the following would cause an adjusting journal entry to be recorded as a result of preparing the bank reconciliation?

A. deposits in transit
B. bank service charges
C. outstanding checks
D. checks clearing the bank returned with the statement