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Dylan Co., Bank Reconciliation

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INSTRUCTIONS: Indicate the proper place for each of the following reconciling items by inserting the correct letter from the bank reconciliation form below in the Answers column.

Dylan Co., Bank Reconciliation, April 30, 20—
Cash balance per bank statement $XX  Cash balance per depositor's records $XX
Additions A                                               Additions C
Deductions B                                             Deductions D
Adjusted balance $XX                             Adjusted balance $XX


1. Deposit in transit not recorded by bank, $6,668
2. Customer's check returned by bank to depositor because of insufficient funds, $204
3. Canceled check for $175 not recorded in journal
4. Proceeds of bank loan omitted from journal, $56,125
5. Bank debit memorandum for service charges, $35
6. Check for $345 written by Upton Co., but erroneously charged by bank to Dylan Co.
7. Checks outstanding, $11,456
8. Deposit of $7,950 recorded in journal as $7,590
9. Bank credit memorandum for note collected by the bank, $6,150,
including $150 interest
10. Deposit of $6,900 erroneously listed on the bank statement as $9,800

FILL-IN-THE-BLANK—PRINCIPLES AND TERMINOLOGY—35%
INSTRUCTIONS: Complete each of the following statements by writing the appropriate words in the Answers column.

1. The procedures used by a company to safeguard its assets, process information accurately, and ensure compliance with laws are called.
2–4. Before a voucher is prepared for the purchase of merchandise, the three documents to support the correctness of the amount of the liability are the:
2. (1)
3. (2)
4. (3)
5. A fund established to avoid writing checks for small amounts is called a(n)
6. A cash balance required by the bank to be maintained by a business is called a(n)
7. Cash equivalents are considered “equivalent” because they are highly
8. Compensating balances should be disclosed in the
9. The bank knows who is authorized to sign checks because they require a(n)
10. If the actual cash received from cash sales is more than the amount
indicated by the cash register tally, the overage would be credited to an account entitled
11–13. The three objectives of internal control are to provide reasonable assurance that ; assets are
12. business information is
13. laws and regulations are
14. A debit balance in the cash short and over account is reported on the income statement in the section entitled

INSTRUCTIONS: In the appropriate columns, insert the letters of the accounts to be debited and credited in recording the selected transactions described below.

A. Accounts Payable      F. Cash Short and Over    J. Misc. Administrative Expense N. Office Supplies
B. Accounts Receivable G. Interest Expense           K. Misc. Selling Expense O. Petty Cash
C. R. Havens, Capital    H. Interest Revenue           L. Notes Payable P. Purchases
D. R. Havens, Drawing  I. Merchandise Inventory  M. Notes Receivable Q. Sales
E. Cash

0. Purchased office supplies on account
1–2. Issued check for payment for merchandise purchased on account, within the discount period
3–4. Issued check to establish petty cash fund
5–6. The actual cash counted and deposited was less than the amount
recorded on the cash register receipt tape for sales for the day
7–8. Recorded entry based on bank reconciliation for bank credit
memorandum for note collected by bank
9–10. Recorded entry based on the bank reconciliation for bank debit
memorandum for customer’s check returned by bank for
insufficient funds
11–12. Reimbursed the petty cash fund for disbursements made for office supplies, miscellaneous administrative expense, and miscellaneous selling expense

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