CB Banking and Cash Management 3

Question 1

An electronic funds transfer (EFT) received by the bank but not yet recorded in the company's books would appear on the bank reconciliation as:

Accepted Answer

An addition to the book balance

Answer

Since the bank already received the EFT, the bank balance is higher; to reconcile, the company must add this amount to its book balance and record it with a journal entry.

Question 2

After all reconciling items are applied, if the adjusted book balance still does not equal the adjusted bank balance, this most likely indicates:

Accepted Answer

An error in the company's books or bank records that must be investigated

Answer

Once all legitimate reconciling items are accounted for, any remaining difference signals an error — either in the company's books or on the bank statement — that requires correction.

Question 3

When a customer's check previously deposited is returned by the bank as NSF, the bookkeeper should record:

Accepted Answer

Debit accounts receivable; credit cash

Answer

An NSF returned check reverses the original deposit entry: cash is reduced (credited) and accounts receivable is reinstated (debited) because the customer's debt was not satisfied.

Question 4

A bank lockbox system is primarily designed to:

Accepted Answer

Accelerate collection of customer payments and reduce internal handling of incoming checks

Answer

A lockbox system routes customer remittances directly to the bank for immediate processing, speeding up cash collection and reducing the risk of internal misappropriation.

Question 5

In cash management, 'float' refers to:

Accepted Answer

The time between when a check is written and when it clears the paying bank

Answer

Float is the period during which a check has been issued and recorded by the payer but has not yet been deducted from the payer's bank account.

(CB) Certified Bookkeeper Practice Test

(CB) Certified Bookkeeper Practice Test

CB Banking and Cash Management 3