61. It is not necessary for businesses to reconcile their checking accounts since banks keep accurate records and provide internal control support for cash. 62. A bank reconciliation usually yields an adjusted bank balance as well as an adjusted book balance. 63. After preparing a bank reconciliation adjustments must be made for items reconciling the bank balance and items reconciling the book balance. 64. An NSF check for $17.50 would be recorded as a debit to Cash and a credit to Accounts Receivable. 65. Factors that cause the bank statement balance for a checking account to be different from the company’s checking account balance include: outstanding checks deposits in transit deductions for bank fees additions for interest and errors. 66. The steps to reconcile the balance of the bank statement to the adjusted balance include adding outstanding checks deposits and bank service charges. 67. When merchandise is needed a department manager must inform the purchasing department of its needs by preparing and signing a purchase requisition which lists the merchandise needed and requests that it be purchased. 68. An invoice is an itemized statement of goods prepared by the vendor listing the customer’s name items sold sales prices and terms of sale. 69. The voucher register is a journal that is used to record approved vouchers. 70. An invoice is a document that is used within a company to notify the appropriate persons that ordered goods have been received and to describe the quantities and condition of the goods. 71. When a voucher system is used recording a purchase is initiated by an invoice approval and a voucher not an invoice. 72. In order to streamline the purchasing process department managers should place orders directly with suppliers. 73. A purchase requisition is a document the purchasing department sends to the vendor to place an order. 74. Assume that a buyer receives a shipment of MODEL SD010 with an invoice amount of $780 although $870 worth of goods were received. The purchase order was for $870. Since the difference was in the buyer’s favor the buyer’s purchasing department should authorize payment of $780. 75. The net method for recording purchases records the purchase invoice at its net amount of any cash discount. 76. The Discounts Lost account represents the savings earned in taking advantage of purchase discounts. 77. An invoice for $1 200 with terms of 2/10 n/30 implies that a buyer has an opportunity to save $24 if the invoice is paid within 10 days. 78. Under the net method an invoice for $2 000 with terms of 2/10 n/30 should be recorded with a debit to Inventory and a credit to Accounts Payable of $2 000. 79. Under the net method an invoice for $1 500 with terms of 1/10 n/30 should be recorded with a debit to Inventory and a credit to Accounts Payable for $1 350.
