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Practice_problems - Practice problems Chapters 4 and 5 1...

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Practice problems, Chapters 4 and 5 1. Which of the following is correct with respect to a bank reconciliation? Subtract interest earned from the bank’s balance. Add service charges to the company’s balance. Subtract NSF checks from the company’s balance. Add deposits outstanding to the company’s balance. 2. After preparing a bank reconciliation, the service fee charged by the bank would be recorded with: a credit to service charge expense. a debit to cash. a credit to service fee revenue. a debit to service charge expense. 3. After preparing a bank reconciliation, a check outstanding for the payment of advertising would be recorded with: a debit to advertising expense. a debit to cash. a credit to advertising expense. No entry is needed. 4. The balance in the a Company's cash account on May 31 was $19,700, before the bank reconciliation was prepared. The May bank statement showed an ending balance of $23,200. The following are items that the company's accountant found that were needed to prepare a bank reconciliation for May: Checks outstanding $4,300 NSF check 140 Note collected by bank for the Colt Company 1,200 Deposit outstanding 1,800 Bank service charges 60 What is the amount of cash that should be reported on the company’s balance sheet for May 31? $20,700 $17,200 $18,700 $22,200
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Use the following information to answer Questions 5 and 6 : A Shop sold $100,000 of its inventory on account. The inventory originally cost $60,000. Nancy uses a perpetual inventory system.
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