AFE Quiz 19: Bank Reconciliation – Accounting for Everyone

What is the primary purpose of preparing a bank reconciliation?

To detect errors and fraud
To prepare financial statements
To record revenue
To calculate depreciation

Which of the following would be added to the book balance during bank reconciliation?

Outstanding checks
Deposits in transit
Bank service charges
Interest earned

Which item would be subtracted from the bank statement balance?

Deposits in transit
Outstanding checks
Bank collections
Interest earned

Which of the following would NOT require an adjusting journal entry after a bank reconciliation?

Bank service charges
Outstanding checks
Interest earned
NSF (bounced) checks

Deposits in transit are:

Deposits recorded by the bank but not yet by the company
Deposits recorded by the company but not yet by the bank
Checks written but not yet mailed
Checks returned for insufficient funds

Which of the following would be subtracted from the book balance during bank reconciliation?

Outstanding checks
Deposits in transit
NSF (bounced) checks
Bank error (understated deposit)

An outstanding check is:

A check written by the bank, not yet recorded by the company
A check written by the company, not yet cleared by the bank
A check received from a customer
A check returned for insufficient funds

Which of the following would NOT appear on a bank statement?

Bank service charges
Deposits in transit
Canceled checks
Interest earned

After preparing a bank reconciliation, which balance should be used in the financial statements?

The ending bank statement balance
The adjusted book balance
The adjusted bank balance
The beginning book balance

Which of the following is TRUE about bank errors on the bank reconciliation?

They are adjusted on the book side
They are adjusted on the bank side
They are ignored
They are adjusted on both sides