81. An NSF check returned by the bank should be entered in the depositor's accounting records by a debit to:
A. Accounts Receivable.
B. An expense account.
C. Cash.
D. Cash Over and Short.
82. In preparing a bank reconciliation, a service charge shown on the bank statement should be:
A. Added to the balance per the bank statement.
B. Deducted from the balance per the bank statement.
C. Added to the balance per the depositor's records.
D. Deducted from the balance per the depositor's records.
83. Enclosed with the bank statement received by Sydney Company at October 31 was an NSF check for $300. No entry has yet been made by the company to reflect the bank's action in charging back the NSF check. During preparation of the bank reconciliation, the NSF check should be:
A. Deducted from the balance per the depositor's records.
B. Deducted from the balance per the bank statement.
C. Added to the balance per the bank statement.
D. Added to the balance per the depositor's records.
84. When a bank reconciliation has been satisfactorily completed, the only related entries to be made in the depositor's records are:
A. To correct errors made by the bank in recording the dollar amounts of cash transactions during the period.
B. To reconcile items that explain the difference between the balance per the books and the balance per the bank statement.
C. To record outstanding checks and bank service charges.
D. To record items that explain the difference between the balance per the accounting records and the adjusted cash balance.
85. During preparation of a bank reconciliation, outstanding checks should be:
A. Added to the balance per the bank statement.
B. Deducted from the balance per the bank statement.
C. Added to the balance per the depositor's records.
D. Deducted from the balance per the depositor's records.
86. When there is an Allowance for Doubtful Accounts in use, the writing-off of an uncollectible accounts receivable will:
A. Reduce income.
B. Reduce an expense.
C. Not change income or total assets.
D. Increase total assets.
87. Which of the following items would cause cash per the bank statement to be smaller than the balance of cash shown in the accounting records?
A. Outstanding checks.
B. Interest earned on the average balance of the checking account.
C. Check no. 824, in the amount of $620.30, is recorded by the bank as $602.30.
D. Deposits in transit.
88. Which of the following items would cause cash per the bank statement to be larger than the balance of cash shown in the accounting records?
A. Bank service charges
B. Deposits in transit
C. Outstanding checks
D. NSF check from one of the depositor's customers
89. When a petty cash fund is in use:
A. Petty cash is debited only when the fund is replenished.
B. The general bank account is debited only when this fund is established.
C. Small payments are made out of cash receipts before they are deposited.
D. Expenses paid from the fund are recorded when the fund is replenished.
90. When preparing a bank reconciliation, bank service charges 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.