Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

6. Internal Controls and Reporting Cash

Bank Reconciliation

Financial Accounting

6. Internal Controls and Reporting Cash

Bank Reconciliation

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Multiple Choice

When confirming accounts payable during a bank reconciliation, which of the following procedures is most appropriate?

Verify the bank's ending balance with the company's general ledger cash account.

Compare the accounts payable ledger to vendor statements and confirm balances directly with vendors.

Match the cash receipts journal to the bank statement deposits.

Recalculate the outstanding checks listed on the bank reconciliation.

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Verified step by step guidance

Understand the context of the problem: The question is about confirming accounts payable during a bank reconciliation. Accounts payable refers to amounts owed by the company to vendors or suppliers, and the goal is to ensure accuracy in the balances recorded.

Identify the most appropriate procedure: The correct procedure involves comparing the accounts payable ledger to vendor statements and confirming balances directly with vendors. This ensures that the company's records match the vendor's records and helps identify discrepancies.

Clarify why other options are less relevant: For example, verifying the bank's ending balance with the company's general ledger cash account is related to cash reconciliation, not accounts payable. Similarly, matching the cash receipts journal to the bank statement deposits pertains to cash inflows, not payables. Recalculating outstanding checks is part of reconciling the bank statement, not confirming accounts payable.

Explain the importance of the correct procedure: Comparing the accounts payable ledger to vendor statements ensures that the company is accurately recording its liabilities. Confirming balances directly with vendors provides external validation and helps prevent errors or fraud.

Summarize the process: To confirm accounts payable during a bank reconciliation, focus on reconciling the accounts payable ledger with vendor statements and directly confirming balances with vendors. This ensures the accuracy and reliability of the company's financial records.