AFC Bank Reconciliation Flashcards
6 cards from real AFC practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 AFC Bank Reconciliation flashcards as text
A check for $540 was correctly recorded by the bank but entered in the company's books as $450. In the bank reconciliation, this error is:
Answer: Deducted $90 from the book balance
The company understated the check by $90 ($540 − $450), so the book balance must be reduced by $90 to correct the error.
An NSF (non-sufficient funds) check returned by the bank means:
Answer: The customer's check bounced and cash must be reduced on the company's books
An NSF check was dishonored by the customer's bank; the company must reverse the original deposit entry, reducing cash and reinstating the receivable.
Which of the following items would appear on the bank side of the reconciliation (not the book side)?
Answer: Outstanding checks
Outstanding checks are checks the company has written and recorded, but the bank has not yet processed, so they appear as adjustments to the bank balance.
A note receivable collected by the bank on the company's behalf for $1,000 plus $50 interest has not been recorded in the company's books. What is the correct adjustment?
Answer: Add $1,050 to the book balance
The bank collected $1,050 for the company; since the company hasn't recorded it yet, add $1,050 to the book balance and record the journal entry.
After all reconciling items are applied, the adjusted bank balance and adjusted book balance should:
Answer: Both equal the same reconciled cash balance
A properly completed bank reconciliation results in both adjusted balances agreeing to the same correct cash balance.
How often should a bank reconciliation typically be prepared for good internal control?
Answer: Monthly
Monthly bank reconciliations are a best practice internal control because they promptly detect errors, fraud, and unauthorized transactions.