2

• TRUE


  A deposit made by an entity will increase the bank's deposit liability.
• At the time a check was made by an entity, there is already a corresponding decrease in the bank's deposit liability.

  FALSE
• Utilities incurred by the entity that was directly paid by the bank is considered as a debit memo.

  TRUE
• Granting of a loan by a bank to a depositor entity will increase the bank's deposit liability to the entity.

  TRUE
• The bank's direct deduction of its maturing loan receivable from the depositor's bank account is considered as a credit memo.

  FALSE
• Bank service charge is considered as a bank-reconciling item.

  FALSE
• A depositor entity's note receivable that was collected by the bank is considered as a credit memo.

  TRUE
• TRUE

  Defective customer checks are considered as book-reconciling item.
• Outstanding checks are those already in the possession of the payees but are yet to be encashed in the drawee bank.

  TRUE
• When determining the adjusted cash in bank balance, certified checks are deducted from the bank statement balance.

  FALSE
• Deposits in transit are added to the bank statement balance.

  TRUE
• Bank service charges are added to the book balance in determining the adjusted cash in bank balance.

  FALSE
• In determining the adjusted cash in bank balance, customer's direct payments to the entity's bank account are added to the bank statement balance.

  FALSE
• The correction of overstatement in the entity's recording of a check will have a net increasing effect to the book balance in determining the adjusted cash in bank.

  TRUE
• The correction of understatement in the entity's recording of its deposit will have a net decreasing effect to the book balance in determining the adjusted cash in bank.

  FALSE