IMG

NamePre- Test# 7

Chapters (20-23)

MULTIPTE CHOICE. Choose the one alternative that best completes the statement or answers the question.

1) A surprise payroll payotf in which employees must pick-up and sign for their pay check is one 1)means of:

A) identi{ying employees who do not have proper work credentials.B) identifying employees who have not submitted proper W-2 forms.C) testing for nonexistent employees.D) establishing a tightly controlled fraud-free work environrnent.

2) \{hich of the following types of audit procedures is ordinarily emphasized the least when auditin g 2)\t-J

payroil?A) Analytical proceduresC) Tests of controls

B) summary payroll reports.D) employee folders.

B) Tests of details of balancesD) Tests of transactions

3) Records that include data about employees such as employment date, performance ratings and pay 3) f jrates are the:

A) human resource records.C) employee screening forms.

4) The audit procedure "Recompute hours worked from time cards" is normally performed whentesting the completeness objective for payroll.

A)True B)False

5) \44ren labor is a material part of inventory auditors should emphasize substantive tests of 5)transactions.

A) True B) False

6) The total of the individual employee earnings in the payroll master file should equal the total:A) balance of gross payroll in general ledger accounts.B) gross pay for the current week's payroll.C) of the checks drawn to employees for payroll.D) gross payroll plus the total contributed by the emproyer for payroll taxes.

7) \44ren labor is a significant part of inventory verifying the proper accounting of these costs shouldbe tested in the:

A) inventory and warehousing cycle. B) acquisitions and payments cycle.

/\

J

6)

t

7) ,-^''

B) acquisitions and payments cycle.

8) In process cost systems, costs are accumulated by individual jobs.A)True B) False

A-i

9) In performing audit tests of the client's cost accounting s,vstem, the auditor is primarily concerned 9)

with which of the foliowing?A) The client's cost accounting system is designed on the basis on acceptable cost accounting

systems.B) Lrventory counts agree with the client's accounting records.C) System is functioning properly in providing costing and pricing hJormation for management.D) Costs have been properly assigned to finished goods, work-in-process, and cost of goods

sold.

10) If an auditor were concemed with obtaining evidence about the appropriateness of the value of 10) ,.'iinventory, which of the following tests would be most appropriate?

A) price tests

B) compilation tests

C) physical examination of the inventoryD) confirmation of inventory held by outside parties

11) The exclusion of a single equity transaction is often highly material.A) True B)False

12) The audit of owners' equity of public and private companies is very different. \A4:rich of the 12) ,-tfollowing is not one of these differences?

A) Type of noncurrent debt (public companies issue more bonds).B) The number of transactions (private companies have fewer transactions).C) Complexity of transactions (public companies generally have more complex transactions).D) Payment of dividends (public companies rarely pay dividends).

i_,13) Notes payable are generally for short periods of time. 13) :*"-

A)True B) False

14) The record of the outstanding shares at any given time is maintained in the: 14) **A) corporate directory. B) schedule of stock owners.C) shareholders' capital stock master file. D) stock certificate books.

15) \Atrhen conducting the audit of stockholders' equity it is normal practice to veri{y all capital stock 15)

transactions:A) only when the client is small.B) that are in excess of a material amount.C) regardless of the controls in existence, because of their materiality and permanence in the

records.D) if there aren't very many during the year.

11)

16) \,t/hich of the following statements is correct?A) Bank personnel are not responsible for providing information related to interest on the bank

confirmation.B) Bank personnel are not responsible for searching their records for bank balances or loans

beyond those included on the bank confirmation.C) Bank personnel are responsible for providing reasonable assurance that a response to a bank

confirmation is accurate.D) Bank personnel are responsible for providing complete assurance that a bank confirmation is

complete.

16)

A-2

jj

17) Aproofof cash receipts is not useful for uncovering the theft of cash receipts or the recording and n f'" ideposit of an improper amount of cash.

' A)True B) False

/18) \A4ren auditing petty cash, the emphasis should be on testing controls over Petty cash transactions 18) t'

rather than the ending baiance in the account.

A) True B) False

19) A partial-period bank statement and the related canceled checks, duplicate deposit slips, and other 19)

documents inciuded in bank statements, mailed by the bank directly to the CPA firm's office, is

called:A) a year-end bank statement. B) a four-column proof of cash.

C) a cutoff bank statement. D) a short-period bank statement'

20) The most important controls for petty cash relate to: 20) '

The use of a separate bank account The use of an imprest fund

No No

The use of a separate bank account The use of an imprest fund

Yes Yes

The use of a separate bank account The use of an imprest fund

No Yes

The use of a separate bank account The use of an imprest fund

Yes No

21) The use of an imprest payroll account prevents losses from payment of uaauthorized payroll to no 21) t

more than the balance in the imprest account.

A)True B) False

22) Manycompanies use outside payroll services to process payrol1. i /hich of the following regardin 8 22) lthe auditors responsibilities is most correct regarding their reliance on the intemal controls of these

outside payroll services?

A) must B) can often C) rarely D) cannot ..- .

23) \Alhich of the following best describes the systems of intemal control for payroll for large 2q ;' ,

companies ?

A) highly structured and well controlled B) toosely structured but well controlled

24) \{4rich of the following is not an assertion related to the classes of transactions underlying the 24)

-payroll cycle?

A) Accuracy B) Classification C) Existence D) Occurrence

A)

B)

c)

D)

A-3

25)

7

25) The periodic payment from the general cash account to the pavroll account for net payroll shouldt

be iested for at least one payroll period. The primary audit procedure is a(n):

A) substantive test that the correct amount was transferred for this test period.B) iest of controls that an imprest account is being used for payroil.C) test of transactions that the check is prepared for the proper amount and transmitted to an

imprest bank account before payroll checks are handed out.

D) analytical review procedure that net pay is reasonable.

26) Verification of the legitimacy of year*end unpaid bonuses to officers and employees can be

accomplished by comparing the recorded accrual to the amount:

I

)6\,'-" / "

27)Tlne file for recording each payroll transaction for each employee and maintaining total employee

wages paid for the year to date is the:

A) authorized in the minutes of the board.C) in the expense account.

A) payroll joumal.C) job time ticket.

A) ControllerC) Treasury

B) used in the prior period.D) paid in the subsequent period.

B) summary payroll report.D) payroll master file.

B) Human ResourcesD) General Accounting

onL/ ) --'

30) r

28) The total of the individual employee eamings in the payroll master file should equal the total:

A) gross payroll plus the total conkibuted by the employer for payroll taxes.

B) balance of gross payroll in general ledger accounts.

C) of the checks drawn to employees for payroll.D) gross pay for the current week's payroll.

29) \A4rich of the following departments is most likely responsible for pay rate changes and changes indeductible amourLts for employees?

?R)

2e)

30) If an auditor wishes to test the completeness transaction-related audit objective in the payroll and

personrLel cycle, which of the following would be a reasonable test of control?A) Account for a sequence of payroll checks.

B) Reconcile the payroll bank account.

C) Examine payroll records for indication of pay rate approval.D) Examine procedures manual and observe the recording of tralsactions.

31) Most companies, with the exception of small ones, have effective controls over the payroll cycle.

A) True B) False

31)

32) Which of the following internal control objectives is likely to be the most important in the audit of

A) Recorded transactions are recorded in the proper accounting period.B) Recorded transactions represent valid payments.C) Payroll transactions are processed by an outside service provider.D) Payroll transactions are properly disclosed and presented in the notes to the financial

statements.

A-4

33) \Alhich of the following best describes effective intemal control over payroll?A) The pa)'rnent of cash to employees should be replaced with payment by checks.

B) The preparation of the payroll must be under the control of the personnel department.

C) The duties of hiring, payroll computation, and payment to employees should be segregated.

D) The confid.entiality of employee payroli data should be carefully protected to prevent fraud.

34) \ /lrich of the following would have the least amor:nt of importance regarding controls over the

processing of payroll?A) Distribution of pay checks should be performed by someone who is not involved in the other

payroll functions.B) The person authorized to sign paychecks should not be otherrvise involved in the preparation

of the payroll.C) A check-signing machine should not be used to replace a manual signature.

D) Unclaimed paychecks should be immediately retumed for redeposit.

35) The primary purpose of a surprise payroll payoffis to detect employees who have reported more

time than was actually worked (fraudulent hours).A)True B) False

36) \Alhile most cycles include at least two classes of transactions, the payroll and personnel cycle

includes only one class of transactions.

37) The usual audit test for a public company's officer compensation is to obtain the authorized salary

36)

J/)

A)True B) False

of each officer from the minutes of the board of directors and compare it with:A)

r trom the rnmutes rectors ana compare

the SEC's 10-K report.the company's federal income

tax return.

Yes No

the SEC's 10-K report.the company's federal income

tax return.

No Yes

the SEC's 10-K report.the company's federal income

tax retum.

Yes Yes

the SEC's 10-K report.the company's federal income

tax retum.

No No

JJ)

34)

l-,.'35) i.*/

,!/

i

B)

c)

D)

38) A signed payroll check that has not been cashed is considered an asset to the company that issued 38)

the check.

A) True

A-5

B) False

39) To minirnize the opportunity for fraud, unclaimed sa1ary checks should be:

A) deposited in a special bank account.B) left with the employee's supervisor.C) hetd for the employee in the personnel departnent.D) kept in the payroll department.

40) \A/hen auditing the payroll and persorurel cycle, tests of controls are routinely performed.A) True B) False

I

41) The audit of year-end physical inventories should include steps to veri-fu that the client's purchases 41) ; -''and sales cutoffs were adequate. The audit steps should be designed to detect whether merchandiseincluded in the physical count at year-end was not recorded as a:

A) purchase retum in the subsequent period. B) purchase in the current period.C) sale in the subsequent period. D) sale in the current period.

l_42) \Atrhen an auditor observes that personnel who are responsible for physically counting inventory are 42) ;-

not following the inventory instructions, the auditor should:A) modify the client's physical inventory instructions.B) not discuss the problem with cLient's supervisor in order to maintain independence.C) contact a client's supervisor in an attempt to correct the problem.D) assign audit staff to the inventory colrnt.

43) If the perpetual inventory master files show lower quantities of inventory than the physical count, 43) .- ..

one explanation of the difference might be unrecorded sales.

A) True B) False ! :

44) The inventory and warehousing cycle can be thought of as having two separate but closely related ++1 ,f ;

systems, one involving the actual physical flow of goods, and the other the:

A) storage of the goods.B) prevention of waste, obsolescence, and theft.C) intemal control over those goods.D) related documentation.

,,

45) The audit procedure "Perform tests of lower-of-cost-or-market, selling price, and obsolescence" 45) !provides assurance mainly for the reahzable value objective for inventory pricing and compilation. --7----:--

A)True B) False

46) Pricing manufactured inventory is difficult. Auditors must evaluate the method of allocating 46)manufacturing overhead for all but which of the following?

A) compliance with accounting standards B) reasonableness

F.47) Production personnel should ordinarily be responsible for maintaining perpetual inventory 47) -

records.

A) True

,F.f-3e) t'

\

^) f;

A-6

B) False

4R)48) The most important part of the observation of inventory is to deterrnine whether:

A) aii counts are accurate.

B) the physical count is being taken in accordance with the client's instructions.

C) obsolete inventory has been identified.D) the inventory-takers are qualified.

49) You are auditing the inventory account and are concemed about the possibility of an inventory

overstatement. \Alhat is the best audit procedure to detect damaged inventory?

A) compare inventory tumover from the previous year's inventory to the current year's

inventoryB) compare the condition of inventory from the previous year's count to the current year

C) reconcile the inventory counts to the cost accounting records

D) obsewe the condition of inventory during the client's physical count

50) From which of the following evidence-gathering audit procedures would an auditor obtain most

assurance conceming the existence of inventories?

A) auditor's recomputation of inventory extensions

B) written inventory representations from management

C) observation of physical inventory counts

D) confirmation of inventories in a public warehouse

51) Hardy Company mass-produces eight different products. The controller who is interested in

strengthening intemal controls over the accounting for materials used in production would be most

likely to implement a(n):

A) economic order quantity system.

B) job order cost accounting system.

C) perpetual inventory system.

D) separation of duties among production personnel.

52) \A4rich of the following would you normally characterize as a di{ficult and complex account to

audit?

4e)

s0)

51)

1'.52)

'.*",

t

53) hr most manuJacturing companies, the inventory and warehousing rycle begins with the: 53) i*''A) initiation of production of a customer's order.B) completion of production of a customer's order.

C) receipt of a customer's order.D) acquisition of raw materials for production of an order.

A) True B) Falsei

accumulate costs by ind.ividual jobs as material is issued into production and labor costs 55) -are incurred.

A) Manufacturiog systemsC) |ust-in-time production systems

55\

A) property, plant and equipmentC) prepaid insurance

B) cash

D) inventory

B) Process cost systems

D) Job order cost systems

A-7

56)56) If an auditor were concemed with obtaining evidence about the appropriateness of the value of

inventory, which of the following tests would be most appropriate?

A) confirmation of inventory held by outside parties

B) physical examination of the inventoryC) price tests

D) compilation tests

57) If the auditor concludes that physical controls over inventory are so inadequate that the inventory

will be difficult to count, the auditor should ordinarily:A) withdraw from the engagement.

B) hire a specialist to assist the auditor.

C) conduct expanded obsewation tests of physical inventory.

D) issue a qualified audit rePort.

58) The extent and timing of an auditor's physical examination of inventory is significantly influenced

by the adequary of the cLient's perpetual inventory records.

A) True B) False

59) The test of details of balance procedure which requires the auditor to perform tests of

lower-of-cost-or-markef selling price, and obsolescence is an attempt to satisfy the objective of:

57)

s8)

5e) =-,-

60) Which of the foilowing is not a function within the inventory and warehousing rycle?

A) completeness.C) accurary.

A) ship finished goods

C) store raw materials

B) existence.D) realizable value.

B) process invoices for shipped goods

D) process the goods

60)

61)61) Auditor tests of physical controls over raw materials, work-in-process, and finished goods are

performed by:A) Examination Observation h,qoiry

No Yes No

Examination Observation It'rC.tiry

Yes No Yes

B)

c) Examination Observation InquiryNo Yes Yes

D) Examination Observation InquiryYes Yes No

62) Receipt of ordered materials by the receiving department will generate the completion of a form

called the:

62) :,

A) inventory acquisition summary.C) bill of lading.

B) receiving report.D) materials requisition.

A-8

63) The amount of time spent verifying ow:ners' equity is frequently minimal for closely heldcorporations because:

A) ihere are few if any transactions during the year for the capital stock accounts, except forearnings and dividends.

B) the few owners all have access to the books so the auditor spends more time on accounts like

Liabilities, which affect outsiders.C) there is no public interest in these companies.

D) these companies are so small that it is not necessary to audit the capital section.

54) A prior period adjustnnent may result in a debit or credit to a company's retained eamings account.

65) Any company with stock listed on a securities exchange is required to engage a(n)

-.

64)

6s)

66)

A)True B) False

63).]:

:

A) equity analystC) independent registrar

B) equity placement specialistD) stock transfer agent

66) The audit procedure "examine duplicate copies of notes payable to determine whether the notes

payable were dated on or before the balance sheet date" is done for which of the followingbalance-related audit objective?

I

;

L_.

A) completeness B) cut-off C) efstence D) detail tie-in

67)The audit procedure "Examjne notes payable, minutes, and bank confirmations for restrictions" is

performed when verifing the classification objective for notes payable.

A) True B) False

68) \,Vhich of the following is not an objective of the auditor's examination of notes payable?

A) To determine whether the liability for notes and related interest expense and accrued

liabiLities are properly stated.B) To determine whether intemal controls are adequate.

C) To determine whether transactions regarding the principal and interest of notes are properlyauthorized.

D) To determine whether client's financing arrangements are effective and efficient.

69) Notes payable are generally for short periods of time.

68) ,.*,"-'

A)True B) False

70) An auditor is determining whether an issuance of notes payable for cash was correctly recorded.

i

70\'-tE

Her best coLrrse of action would be to:A) confirm with the bond trustee as to the amount of bonds issued.

B) confirm with the underwriter as to the appropriate market yield on the bonds.

D) trace the cash received from the proceeds to the accounting records.

71) II a company employs a capital stock registrar and/or transfer agent, the registrar or agent, or bo*1 71)

should be requested to confirm directly to the auditor the number of shares of each class of stock:

A) issued and outstanding at the balance sheet date.

B) surrendered and canceled during the year.

C) authorized at the balance sheet date.

D) authorized, issued" and outstanding during the year.

6e)

tf

A-9

i

72) \Allren a company maintains its own records of stock transactions and outstanding stock, intemal 72)

controls must be adequate to ensure that:

A) actual owrrers are recorded in the bylaws.B) the correct amount of dividends is paid to stockholders owning the stock on the declaration

date.C) the correct amount of dividends is paid to stockholders owrring the stock on the dividend

record date.D) actual owrrers are recorded in the minutes.

73) The audit objective to determine that notes payable in the schedule actually exist is verified by the 73) -

test of details of balances procedure to:

A) recalculate interest expense.

B) foot the notes payable list.C) examine the balance sheet for proper disclosure of noncurrent portions.

D) confirm notes payable.

74)Theaudit objective that requires that existing notes payable be includ.ed in the notes payable 74) fschedule is satisfied by performing which of the following audit procedures?

A) obtain confirmations from creditors who have held notes from the client in the past and are

not currently included in the notes payable schedule

B) review the notes payable schedule to determine whether any are related parties

C) confirm notes payableD) trace the total of the notes payable schedule to the general ledger

j75) \Alhen performing analytical procedures for notes payable, if actual interest exPense is materially 75) ;

Iarger than the auditor's expectation, one possible cause would be interest payments on unrecorded

notes payable.A) True B) False

76) \{hich of the following audit tests would provide evidence regarding the balance-related audit 76) -objective of existence for an audit of notes payable?

A) Examine balance sheet for proper presentation and disclosure of notes payable.

B) Foot the notes payable list for notes payable and accrued interest.

C) Examine corporate mjnutes for loan approval.D) Exarnine due dates on duplicate copies of notes.

77) An auditor's substantive analytical procedure provides the auditor with an interest exPense 77) .-

amount that is significantly higher than the client's recorded interest expense. This finding wouldmost likely lead the auditor to conclude that:

A) client has not properly recorded interest income.

C) client has not properly accounting for the discount of bonds payable account.

D) client has not recorded all long-term interest bearing debt in the accounting records.

78) During the course of an audif a CPA observes that the recorded interest expense seems to be 78)

excessive in relation to the balance in the long-term debt account. This observation could lead the

auditor to suspect that:A) premium on bonds payable is understated.B) long-term debt is understated.C) long-term debt is overstated.

D) discoult on bonds payable is overstated.

A-10

79) Tolerable misstatement is often set at a(n) level for notes payable.

A) high B) moderate C) r.inknown D) low

;80) hr aud.iting debits and credits to retained. earnings, OTHER than net income and dividends, the SO) li I

auditors first concern is:

A) whether the kansactions should have been included in retained eamings.

B) whether the transactions efsted as of the balance sheet date.

C) whether the transactions have been accurately recorded.

D) whether the transactions are classified correctly in the footrotes.

81) \A4rich of the following types of owners' equity transactions would not require authorization by the 81) '*'board of directors?

A) Repurchase of capital stock

C) Issuance of capital stock

7e)

B) Declaration o{ dividendsD) None of the above

j.. ,

82) \A/trich of the following statements regarding the capital acqrrisition and repayment cycle is most 82) vt ,

correct?A) Relatively few transactions affect the cycle, and most are highly material.

B) Large number of transaction affect the cycle, and most are tr-ighly material.

C) Reiatively few transactions affect the cycle, and most are smaller amounts.

D) Large numbers of transactions affect the cycle, and most are smaller amounts.

83) The direct receipt of a confirmation from every bank with which the client does business is: 83) '''''A) necessary for every audit except when there are arL unusually large number of active

accounts.B) recommended but not required by auditing standards.

C) not necessary unless material fraud is suspected.

D) required by auditing standards for every audit. ,u

84) On the last day of the fiscal year, the cash disbursements clerk drew a company check on bank A S ) ;"..r

and deposited the check in the company account in bank B to cover a previous theft of cash. The

disbursement has not been recorded. The auditor will best detect this form of kiting by:

A) comparing the detail of cash receipts as shown by the client's cash receipts records with the

detail on the confirmed duplicate deposit tickets for three days prior to and subsequent to

year-end.B) examining paid checks returned with the bank statement of the next account period after

year-end.C) preparing, from the cash disbursements records, a surunary of bank transfers for one week

prior to and subsequent to year-end.D) examining the composition of deposits in both bank A and bank B subsequent to year-end

j. *.85) Listing ait bank transfers made a few days before and after the balance sheet date and tracing each 85) f

to the accounting records for proper recording is a useful approach to test for:A) kiting. B) channel stuffing.C) lapping. D) income smoothing.

86) The audit and accounting concem addressed in a monthly proof of cash is with:A) determining the month-end balance.

B) identifying cash transfers.

C) adjusting account balances.

D) reconciling the amounts per books and bank.

I

86)

A-11

87) kr an effort to satisfy the completeness objective, the auditor could perform which of the followingtest of details of balance procedures?

A) Trace outstanding checks to subsequent period bank statements.B) Trace the book balance on the reconciliation to the general ledger.C) Review financial statements to make sure that material sar-ings acconnts and certificates of

deposit are disclosed separately.D) Perform a four-column proof of cash.

88) \ /hich of the following verifications would generally not be performed by the auditor in the monthzubsequent to the balance sheet date?

A) verify the bank statement balances when the footed totals are used.

B) Foot the lists of all canceled checks, debit memos, deposits, and credit memos.

C) Review the items included in the footings to make zure that they were cancelled by the bank

D) Verify the book statement balances tie to the cash receipts and disbursements joumals for the

year under audit.

39) The reason for testing the client's bank reconciliation is to verify whether the client's recorded bank

balance is the same amount as the actual cash in bank, except for deposits in transit, checks

outstanding, and other reconciling items. The irLformation needed to complete the tests of the

reconciliation are provided by the:A) canceled checks for the year under audit.B) client's records and ledgers for the vear under audit.C) client's records and ledgers for the subsequent year.D) cutoff bank statement.

90) The standard bank confirmation form has been agreed upon by the:A) AICPA and the American Bankers'Association.B) AICPA and the SEC.

C) SEC and the American Bankers'Association.D) SEC and FASB.

91) A proof of cash represents:A) a substantive test of transactions and test of details of balances.B) a test of controls and substantive test of transactions.C) a substantive test of transactions.D) a test of details of balances.

92) V{hich of the following items would not normally appear on bank reconciliations?A) Balance per bankC) List of deposits in transit

B) Outstanding checksD) Outstanding deposits

87)

88)

8e)

i

e0) ,

e7) {

ot\

93) \A/hen auditing the general cash account, receipt of a standard bank confirmation is the startingpoint for verifying the company's general cash account balance.

A)True B) False

94) A partial-period bank statement and the related canceled checks, duplicate deposit slips, and otherdocuments included in bank statements, mailed by the bank directly to the CPA firm's office, is

called:

I!,l'.

o/\ l. .laJ

A) a year-end bank statement.C) a four-column proof of cash.

B) a cutoff bank statement.D) a short-period bank statement.

A-12

95) The test details of balances procedure that requires the auditor to trace the book balance on thereconciliation to the general ledger is an attempt to satisfy the audit objective of:

A) detail tie-in. B) accuracy. c) completeness. D) existence.

96) \ /hich of the following balance-related audit objectives typically is assessed as having highinherent risk for cash?

A) Detail tie-in B) CutoffC) Presentation and disclosure D) Existenc

97) \Ahen the auditor believes the year-end bank reconciliation may be intentionaliy misstated, it isappropriate to perform extended tests of the year-end bank reconciliation. Assuming the client hasa October 31 year-end, these extended tests would not include:

A) comparing all canceled checks and deposit sLips in the October bank statement with theOctober cash disbursements and receipts records.

B) comparing all September 30 reconciling items with canceled checks and other documents inthe October bank statement.

C) determining that all outstanding checks had cleared by the date of the bank cutoff statement.D) carrying out all Proper procedures subsequent to the end of the year with the use of the bank

cutoff statement.

98) \Alhich of the following statements is correct?A) Auditing standards do not address specific requirements regarding bank confirmations.B) Auditing staadards do not require bank confirmations except when there is an unusually

large number of inactive bank accounts.C) Auditors must obtain bank confirmations on every audit.D) Auditors obtain bank confirmations at their discretion.

The following information applies to the questions below:

l

r1l\t"-1es) lJ

/

e6)

97) \*

il 'lr'

98) \*'

Listed below are four interbank cash transfers, indicated by the numbers 7,2,3, and.4,of a client for late December 2007 andearly January 2008:

Bank Account OneDisbursing Date(Month/Day)

PerBank PerBooks

Bank Account TwoReceiving Date(Month/Day)

PerBank Per Books1.

2.

3.

4.

12131

u2UZUs

72130

72/3a

72131

1213t

12lst12lst

u2u2

72130

12131,

u272t37

an outstanding check on the December 3r,2007 barkreconciliation?c)3 D)4

100) Based on the schedule of interbank transfers above, which of the cash transfers would appear as adeposit in transit on the December 91,2007 bank reconciliation?

A)1 B)2

1*'1oo) \*,

A)1 B)2

A-13

c)3 D)4