CPB / BookKeeping Adjusting Entries and Reconciliations 4

Question 1

Which reconciling item requires a journal entry in the company's books?

Accepted Answer

NSF check charged by the bank

Answer

An NSF check appears on the bank statement but not yet in the books, so the bookkeeper must record a journal entry to reduce cash.

Question 2

A company accrues $1,200 of salaries at year-end. When the salaries are paid in January, which entry is recorded?

Accepted Answer

Debit Salaries Payable $1,200; Credit Cash $1,200

Answer

When accrued salaries are paid, the liability (Salaries Payable) is debited and Cash is credited; the expense was already recognized in the prior period.

Question 3

Book value of an asset is best defined as:

Accepted Answer

Cost minus accumulated depreciation

Answer

Book value equals original cost less all accumulated depreciation recorded to date.

Question 4

At year-end, supplies on hand total $300. The beginning balance was $800 and $1,000 in supplies were purchased during the year. What is the supplies expense for the period?

Accepted Answer

$1,500

Answer

Supplies available = $800 + $1,000 = $1,800; ending balance = $300; supplies used = $1,800 − $300 = $1,500.

Question 5

Which account appears on the balance sheet as a result of recording depreciation?

Accepted Answer

Accumulated Depreciation

Answer

Accumulated Depreciation is a contra-asset account shown on the balance sheet, offsetting the related asset's cost.

CPB / BookKeeping Practice Test

CPB / BookKeeping Practice Test

CPB / BookKeeping Adjusting Entries and Reconciliations 4