Select the alternative that best answers each question or completes each statement.

2. A bank reconciliation must be prepared a. each time the banking institution refuses to lend you money. b. to explain any differences between the company's records and the balance reflected on the account statement issued by the bank. c. when there is suspicion of the commission of an act indicative of fraud. d. by the person authorized to sign checks for the account.

3. Which of the following does NOT cause a decrease in the cash balance according to the company's records? a. bank service charges b. Collection of a promissory note or note receivable c. check returned for insufficient funds (NSF check) d. outstanding checks