Xero Certified Advisor Xero Bank Reconciliation and Cash Management 4

Question 1

When importing a bank statement manually into Xero, which file format is most commonly supported?

Accepted Answer

CSV

Answer

Xero supports CSV (comma-separated values) as the primary format for manual bank statement imports, along with OFX and QIF.

Question 2

What is the effect of reconciling a transaction in Xero on the company's financial statements?

Accepted Answer

It confirms that the bank activity matches the accounting records, with no new entries created

Answer

Reconciliation in Xero is a confirmation process — the accounting entries already exist, and reconciling simply confirms they match the bank statement.

Question 3

A bank fee of $15 appears in the Xero bank feed with no corresponding transaction in Xero. What is the best way to handle this?

Accepted Answer

Create a spend money transaction coded to a bank charges expense account

Answer

Bank fees should be coded directly as a spend money transaction to a bank charges or similar expense account.

Question 4

In Xero, how does a 'bank rule' differ from 'cash coding'?

Accepted Answer

Bank rules auto-suggest coding for future matching transactions; cash coding is a one-time bulk coding interface

Answer

Bank rules create standing automation that applies to new matching transactions, while cash coding is a manual batch tool for coding many transactions at once.

Question 5

Which of the following would cause a reconciling item on a Xero bank reconciliation?

Accepted Answer

A check written in Xero but not yet presented to the bank

Answer

Outstanding checks issued in Xero but not yet cleared the bank are classic reconciling items because they exist in the books but not the statement.

Xero Certified Advisor Practice Test

Xero Certified Advisor Practice Test

Xero Certified Advisor Xero Bank Reconciliation and Cash Management 4