CAP Banking and Cash Management Flashcards
6 cards from real CAP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 CAP Banking and Cash Management flashcards as text
Outstanding checks on a bank reconciliation are:
Answer: Deducted from the bank balance
Outstanding checks have been recorded by the company as payments but have not yet cleared the bank, so they are deducted from the bank balance.
A bank service charge on the bank statement that was NOT recorded in the company's books should be:
Answer: Deducted from the book balance
A bank service charge the company hasn't recorded reduces the company's actual cash, so it must be deducted from the book balance.
Which internal control practice best safeguards cash receipts?
Answer: Separating the duties of receiving, recording, and depositing cash
Segregation of duties prevents any single employee from controlling all aspects of a cash transaction, reducing the risk of theft or error.
A company receives a $200 interest credit on its bank statement that it has not yet recorded. This item should be:
Answer: Added to the book balance
Interest earned is income the bank has credited but the company hasn't recorded, so it must be added to the book balance to reconcile.
What is the purpose of a lock-box system in cash management?
Answer: To accelerate collection of customer payments through a bank P.O. box
A lock-box system routes customer remittances directly to a bank P.O. box, allowing the bank to process deposits faster and reduce mail float.
The adjusted book balance and the adjusted bank balance on a completed bank reconciliation must:
Answer: Be equal to each other
A properly completed bank reconciliation results in both the adjusted book balance and the adjusted bank balance equaling the same true cash balance.