AIPB PRACTICE SOLUTION TESTED QUESTIONS
WITH CORRECT DETAILED ANSWERS ALREADY
GRADED A+
◉Debiting an insurance payment to Rent Expense instead of Insurance
Expense is an example of ....
a. an accrual error
b. a deferral error
c. a classification error
d. use of an incorrect accounting principle . Answer: c. a classification
error
◉InCo. recorded a customer's $20,000 check as a $20,000 debit to Cash
and as a $2,000 credit to Accounts Receivable. This is an example of ....
a. an oversight
b. an incorrect account classification
c. a transposition error
d. a slide error . Answer: d. a slide error
,◉During a bank reconciliation, a deposit recorded by the bank but not in
the company's ledger Cash account is ...
a. added to both the bank balance and the ledger Cash account balance
b. added to the ledger Cash account balance only
c. added to the bank balance only
d. subtracted from the bank balance and added to the ledger Cash
account balance . Answer: b. added to the ledger Cash account balance
only
◉The bank statement balance of $7,000 does not include a check
outstanding of $1,000, a deposit in transit of $275, and another
company's $250 check erroneously charged against your firm's account
The reconciled bank balance is:
a.$6,375
b.$6,580
c.$6,525
d. $6,570 . Answer: c.$6,525
◉Using the following information to answer questions 6-8. You are
doing a bank reconciliation for May 20X1. You have a $2,785.00
unadjusted ledger cash balance and the following data:
, Outstanding checks: No. 719, $200, No. 727 $800, No. 732, $625
Deposits in transit, $1,200
Check No. 742 (for repairs) written for $505 but incorrectly recorded as
$550
NSF check from a customer, $500
Bank service charge for May, $5
Balance per bank statement, $2,750
What dollar amount should be deducted from the balance per bank
statement?
a. $1,425 b. $1,625 c. $505 d. $2,125 . Answer: c. $505
◉What dollar amount should be deducted from the balance per books?
a. $460 b. $505 c. $550 d. $1,625 . Answer: a. $460
◉What adjustment will you need to make to company books?
a. a net decrease in Cash of $550
b. a net decrease in Cash of $505
c. a net decrease in Cash of $460
WITH CORRECT DETAILED ANSWERS ALREADY
GRADED A+
◉Debiting an insurance payment to Rent Expense instead of Insurance
Expense is an example of ....
a. an accrual error
b. a deferral error
c. a classification error
d. use of an incorrect accounting principle . Answer: c. a classification
error
◉InCo. recorded a customer's $20,000 check as a $20,000 debit to Cash
and as a $2,000 credit to Accounts Receivable. This is an example of ....
a. an oversight
b. an incorrect account classification
c. a transposition error
d. a slide error . Answer: d. a slide error
,◉During a bank reconciliation, a deposit recorded by the bank but not in
the company's ledger Cash account is ...
a. added to both the bank balance and the ledger Cash account balance
b. added to the ledger Cash account balance only
c. added to the bank balance only
d. subtracted from the bank balance and added to the ledger Cash
account balance . Answer: b. added to the ledger Cash account balance
only
◉The bank statement balance of $7,000 does not include a check
outstanding of $1,000, a deposit in transit of $275, and another
company's $250 check erroneously charged against your firm's account
The reconciled bank balance is:
a.$6,375
b.$6,580
c.$6,525
d. $6,570 . Answer: c.$6,525
◉Using the following information to answer questions 6-8. You are
doing a bank reconciliation for May 20X1. You have a $2,785.00
unadjusted ledger cash balance and the following data:
, Outstanding checks: No. 719, $200, No. 727 $800, No. 732, $625
Deposits in transit, $1,200
Check No. 742 (for repairs) written for $505 but incorrectly recorded as
$550
NSF check from a customer, $500
Bank service charge for May, $5
Balance per bank statement, $2,750
What dollar amount should be deducted from the balance per bank
statement?
a. $1,425 b. $1,625 c. $505 d. $2,125 . Answer: c. $505
◉What dollar amount should be deducted from the balance per books?
a. $460 b. $505 c. $550 d. $1,625 . Answer: a. $460
◉What adjustment will you need to make to company books?
a. a net decrease in Cash of $550
b. a net decrease in Cash of $505
c. a net decrease in Cash of $460
