96.Refer to the information above. Upon completion of the bank reconciliation, a journal entry will be required to update the depositor's accounting records. This entry will include a:
A. Credit to Cash for $700.
B. Debit to Cash for $700.
C. Debit to Cash for $7.
D. Debit to Bank Service Charge Expense for $7.
The Cash account in the ledger of Clear Windows shows a balance of $12,596 at September 30. The bank statement, however, shows a balance of $16,253 at the same date. The only reconciling items consist of a bank service charge of $16, a large number of outstanding checks totaling $6,740, and a deposit in transit.
97.Refer to the information above. What is the adjusted cash balance in the September 30 bank reconciliation?
A. $16,237.
B. $12,580.
C. $9,513.
D. $5,856.
98.Refer to the information above. What is the amount of the deposits in transit?
A. $5,856.
B. $9,513.
C. $3,067.
D. $3,083.
99.Cardinal Company's bank statement showed a balance at May 31 of $180,974. The only reconciling items consisted of a large number of outstanding checks totaling $51,847. At May 31, what balance should Cardinal's Cash account show?
A. $232,821.
B. $129,127.
C. $77,280.
D. $180,794.
100.All the following are steps included in the preparation of the bank reconciliation except:
A. Comparing deposits listed on the bank statement with the deposits shown in the accounting records.
B. Comparing checks listed on the bank statement with corresponding entries in the accounting records.
C. Deducting any debit memoranda from the balance on the bank statement.
D. Preparing journal entries for any adjustments to the depositor's records.
101.Marketable securities are:
A. Listed immediately after Inventory on the balance sheet.
B. Almost as liquid as cash.
C. Originally recorded at cost less any broker's commission.
D. Sold for a gain when cash received is less than the cost basis.
102.The financial statements of Baxter Corporation include an Unrealized Holding Gain on Investments. This item:
A. Is included in the income statement.
B. Is shown as a reduction in total stockholders' equity.
C. Indicates that Baxter's marketable securities have a current market value higher than cost.
D. Indicate that Baxter Corporation sold marketable securities during the period at a gain.
103.The adjustment of available for sale marketable securities to their current market value affects:
A. The balance sheet.
B. The income statement.
C. The cash flow statement.
D. All of the answers are correct.
104.With available for-sale securities, unrealized holding gains and losses are:
A. Not reported until recognized.
B. Reported on the income statement.
C. Reported as an unearned revenue on the balance sheet.
D. Reported in the stockholders' equity section of the balance sheet.
105.The valuation principle of "fair value accounting" applied to investments classified as available for sale securities:
A. Affects the current period income statement, but not the balance sheet.
B. Enhances usefulness of the balance sheet in evaluating the financial position of a business.
C. Applies to marketable securities and inventories.
D. Requires a corporation to adjust its capital stock account to reflect current market value of its outstanding capital stock.