Month: February 2020

The total of cheques issued during the last six months which at the date on which a bank reconciliation statement is prepared, have not been shown on the bank statement . . .

Select ONE answer:

1. should be included in the bank reconciliation statement.
2. should be shown in the balance sheet under the heading ‘accruals‘.
3. should be cancelled.
4. are ‘stale’ cheques.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct – These cheques (outstanding cheques) must be included in the bank reconciliation statement because they will have been recorded in the accounting records but have not been recorded in the bank statement. They therefore give rise to a difference between the two balances.
2. Not correct – Accruals are amounts unpaid at the balance sheet date – not amounts that have been paid by cheque.
3. Not correct – Cheques should be cancelled by the drawer (the person who wrote them) when he / she does not wish them to be cashed.
4. Not correct – A ‘stale’ cheque is one which is dated more than six months ago and therefore cannot be cashed.

 

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The figure for ‘bank’ which should be shown in a firm’s balance sheet at any particular date is . . .

Select ONE answer:

1. the balance at that date as shown by the firm‘s bank statement.
2. the balance at that date per the firm’s bank nominal (general) ledger account.
3. the reconciled bank balance on that date.
4. None of the above.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct – This balance may be incorrect (may not be the true amount of money available to the firm) because it does not take account of, for example, cheques written but not yet cashed.
2. Not correct – This balance may be incorrect (may not be the true amount of money available to the firm) because it does not take account of bank charges, standing orders, dishonoured cheques, direct debits, credit transfers, and other items shown on the bank statement.
3. Correct
4. Not correct

 

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A cheque that was issued by a firm and sent to one of its creditors has not yet appeared on the firm’s bank statement. This cheque is known as . . .

Select ONE answer:

1. a standing order.
2. a dishonoured cheque.
3. a credit transfer.
4. an outstanding cheque.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct – a standing order is an instruction to a bank to pay a specified amount out of one’s account at regular intervals.
2. Not correct – a dishonoured cheque is a cheque returned by a bank to the person who presented it because there are insufficient funds in the drawer’s account to meet the cheque.
3. Not correct – a credit transfer is a transfer of funds from a person or bank account into another bank account.
4. Correct

 

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A bank reconciliation statement is . . .

Select ONE answer:

1. part of the double-entry accounting records.
2. not part of the double-entry accounting records.
3. prepared by a firm and then sent to its bank.
4. posted to the nominal (general) ledger.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct – A bank reconciliation statement is a reconciliation between a figure in the nominal (general) ledger (double-entry records) and a figure on a bank statement. It is prepared at the end of an accounting period after all double-entry records for that period have been completed.
3. Not correct
4. Not correct

 

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The purpose of a firm preparing a bank reconciliation statement is . . .

Select ONE answer:

1. to ascertain the amount of financing, if any. which it may require in the future.
2. to ascertain whether bank charges have been correctly calculated by the bank.
3. to ascertain whether the correct amount of interest has been paid to the firm by the bank on all money on deposit.
4. to reconcile the bank balance in the firm’s accounting records at a particular date with that shown on its bank statement on the same date.

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct – A projection of the firm’s future cash inflows and outflows is required to ascertain the amount of financing, if any, which it may require in the future.
2. Not correct – A calculation, not a reconciliation, is required to ascertain whether bank charges have been correctly calculated by the bank.
3. Not correct – A calculation, not a reconciliation, is required to ascertain whether the correct amount of interest has been paid to the firm by the bank on all money on deposit.
4. Correct

 

This work is licensed under a Creative Commons Attribution 4.0 International License.