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
What is the primary purpose of a bank reconciliation?
Answer: To ensure the company's cash records agree with the bank statement
A bank reconciliation identifies and explains differences between the company's cash book balance and the bank statement balance.
Which item would appear as an addition to the bank balance on a bank reconciliation?
Answer: Deposits in transit
Deposits in transit have been recorded by the company but not yet processed by the bank, so they are added to the bank balance.
An NSF (Non-Sufficient Funds) check returned by the bank requires the company to:
Answer: Deduct the amount from the book balance
An NSF check reduces the company's book balance because the previously recorded cash receipt is no longer collectible from the bank.
Which of the following is an example of a deposit in transit?
Answer: Cash deposited on Friday that the bank posts on Monday
A deposit in transit is cash the company has recorded and submitted to the bank but that has not yet appeared on the bank statement.
What does a petty cash fund reimburse?
Answer: Small, routine business expenses paid in cash
A petty cash fund is established to pay minor, routine expenses without writing a formal check for each transaction.
When replenishing a petty cash fund, the journal entry debits:
Answer: Various expense accounts and credits Cash
Replenishing petty cash debits the appropriate expense accounts for the items purchased and credits Cash (checking account) for the amount reimbursed.