Question 1

Match the terms with the definitions.
-A fund established to pay for small items with cash.

Accepted Answer

A) restrictive endorsement 
B) bank reconciliation 
C) bank statement 
D) blank endorsement 
E) canceled checks
F)petty cash fund
G)payee
H)check
I)check stub
J)petty cash payments record
K)NSF checks
L)deposit ticket
M)deposits in transit
N)drawee
O)drawer
P)electronic funds transfer
Q)endorsement
R)magnetic ink character recognition code 
A) restrictive endorsement 
B) bank reconciliation 
C) bank statement 
D) blank endorsement 
E) canceled checks
F)petty cash fund
G)payee
H)check
I)check stub
J)petty cash payments record
K)NSF checks
L)deposit ticket
M)deposits in transit
N)drawee
O)drawer
P)electronic funds transfer
Q)endorsement
R)magnetic ink character recognition code

Question 2

Match the terms with the definitions.
-A supply of currency and coins kept in a cash drawer for use in handling sales transactions.

Accepted Answer

A) outstanding checks 
B) cash 
C) petty cash voucher 
D) automated teller machines 
E) change fund
F)internal control
G)credit memos
H)debit memos 
A) outstanding checks 
B) cash 
C) petty cash voucher 
D) automated teller machines 
E) change fund
F)internal control
G)credit memos
H)debit memos

Question 3

The person directed to receive the money indicated by a check is known as the payee.

Accepted Answer

A) True 
 B)False

Question 4

Every person authorized to sign checks for a business must complete and sign a signature card for the bank.

Accepted Answer

A) True 
 B)False

Question 5

Match the terms with the definitions.
-A process using a computer rather than paper checks to complete transactions with the bank.

Accepted Answer

A) restrictive endorsement 
B) bank reconciliation 
C) bank statement 
D) blank endorsement 
E) canceled checks
F)petty cash fund
G)payee
H)check
I)check stub
J)petty cash payments record
K)NSF checks
L)deposit ticket
M)deposits in transit
N)drawee
O)drawer
P)electronic funds transfer
Q)endorsement
R)magnetic ink character recognition code 
A) restrictive endorsement 
B) bank reconciliation 
C) bank statement 
D) blank endorsement 
E) canceled checks
F)petty cash fund
G)payee
H)check
I)check stub
J)petty cash payments record
K)NSF checks
L)deposit ticket
M)deposits in transit
N)drawee
O)drawer
P)electronic funds transfer
Q)endorsement
R)magnetic ink character recognition code

Question 6

In reconciling a bank statement, the bank statement balance is $1,000 and the balance per books is $1,205. A bank service charge is $15; a deposit in transit totals $500, and outstanding checks total $300. The adjusted book balance is

Accepted Answer

A)  $1,490. 
B)  $1,205. 
C)  $1,190. 
D)  $1,505. 
A)  $1,490. 
B)  $1,205. 
C)  $1,190. 
D)  $1,505.

Question 7

A check involves three parties. The person directed to receive the money is called the

Accepted Answer

A)  drawer. 
B)  drawee. 
C)  payee. 
D)  endorser. 
A)  drawer. 
B)  drawee. 
C)  payee. 
D)  endorser.

Question 8

Outstanding checks are checks issued that have not yet been presented to the bank for payment.

Accepted Answer

A) True 
 B)False

Question 9

To reconcile the bank statement, which of the following amounts would be added to the bank statement balance?

Accepted Answer

A)  service charge 
B)  outstanding checks 
C)  deposits in transit 
D)  amounts collected by the bank for the depositor's account 
A)  service charge 
B)  outstanding checks 
C)  deposits in transit 
D)  amounts collected by the bank for the depositor's account

Question 10

In reconciling the bank statement, the outstanding checks are added to the balance shown on the bank statement.

Accepted Answer

A) True 
 B)False

Question 11

A check is a document ordering the depositor to pay cash from the bank's account.

Accepted Answer

A) True 
 B)False

Question 12

To establish a change fund, Cash should be credited and Change Fund should be debited.

Accepted Answer

A) True 
 B)False

Question 13

A depositor may endorse checks with a rubber stamp.

Accepted Answer

A) True 
 B)False

Question 14

The check written to establish the petty cash fund is entered in the journal by

Accepted Answer

A)  debiting Cash and crediting Petty Cash. 
B)  debiting Petty Cash and crediting Owner's Capital. 
C)  debiting Owner's Capital and crediting Petty Cash. 
D)  debiting Petty Cash and crediting Cash. 
A)  debiting Cash and crediting Petty Cash. 
B)  debiting Petty Cash and crediting Owner's Capital. 
C)  debiting Owner's Capital and crediting Petty Cash. 
D)  debiting Petty Cash and crediting Cash.

Question 15

A special ledger account entitled "Change Fund" is used to keep track of day-to-day shortages and overages of cash.

Accepted Answer

A) True 
 B)False

Question 16

On a bank reconciliation, deposits that were not entered by the bank before the bank statement was prepared are known as

Accepted Answer

A)  NSF deposits. 
B)  restrictive deposits. 
C)  deposits in transit. 
D)  unrecorded deposits. 
A)  NSF deposits. 
B)  restrictive deposits. 
C)  deposits in transit. 
D)  unrecorded deposits.

Question 17

The petty cash payments record indicates classified expenditures as follows: Automobile Expense, $20; Supplies Expense, $12; Postage Expense, $6; and Miscellaneous Expense, $5. The transaction would include

Accepted Answer

A)  debiting Automobile Expense. 
B)  crediting Supplies Expense. 
C)  debiting Cash. 
D)  crediting Accounts Payable. 
A)  debiting Automobile Expense. 
B)  crediting Supplies Expense. 
C)  debiting Cash. 
D)  crediting Accounts Payable.

Question 18

When a check is written to replenish the petty cash fund, it is entered in the journal by debiting the proper accounts indicated in the Distributions columns of the petty cash record and by crediting Cash Over and Short.

Accepted Answer

A) True 
 B)False

Question 19

If the cash short and over account has a credit balance at the end of the fiscal year, the balance represents an expense or loss.

Accepted Answer

A) True 
 B)False

Question 20

The depositor who orders the bank to pay a certain amount of money is known as the drawee.

Accepted Answer

A) True 
 B)False

Exam 7: Accounting for Cash

Match the terms with the definitions. -A fund established to pay for small items with cash.

Match the terms with the definitions. -A supply of currency and coins kept in a cash drawer for use in handling sales transactions.

The person directed to receive the money indicated by a check is known as the payee.

Every person authorized to sign checks for a business must complete and sign a signature card for the bank.

Match the terms with the definitions. -A process using a computer rather than paper checks to complete transactions with the bank.

In reconciling a bank statement, the bank statement balance is $1,000 and the balance per books is $1,205. A bank service charge is $15; a deposit in transit totals $500, and outstanding checks total $300. The adjusted book balance is

A check involves three parties. The person directed to receive the money is called the

Outstanding checks are checks issued that have not yet been presented to the bank for payment.

To reconcile the bank statement, which of the following amounts would be added to the bank statement balance?

In reconciling the bank statement, the outstanding checks are added to the balance shown on the bank statement.

A check is a document ordering the depositor to pay cash from the bank's account.

To establish a change fund, Cash should be credited and Change Fund should be debited.

A depositor may endorse checks with a rubber stamp.

The check written to establish the petty cash fund is entered in the journal by

A special ledger account entitled "Change Fund" is used to keep track of day-to-day shortages and overages of cash.

On a bank reconciliation, deposits that were not entered by the bank before the bank statement was prepared are known as

The petty cash payments record indicates classified expenditures as follows: Automobile Expense, $20; Supplies Expense, $12; Postage Expense, $6; and Miscellaneous Expense, $5. The transaction would include

When a check is written to replenish the petty cash fund, it is entered in the journal by debiting the proper accounts indicated in the Distributions columns of the petty cash record and by crediting Cash Over and Short.

If the cash short and over account has a credit balance at the end of the fiscal year, the balance represents an expense or loss.

The depositor who orders the bank to pay a certain amount of money is known as the drawee.

Introduction to Accounting

Analyzing Transactions: the Accounting Equation

The Double-Entry Framework

Journalizing and Posting Transactions

Adjusting Entries and the Work Sheet

Financial Statements and the Closing Process

Payroll Accounting: Employee Earnings and Deductions

Payroll Accounting: Employer Taxes and Reports

Accounting for Sales and Cash Receipts

Accounting for Purchases and Cash Payments

Special Journals

Accounting for Merchandise Inventory

Adjustments and the Work Sheet for a Merchandising Business

Financial Statements and Year-End Accounting for a Merchandising Business

Accounting for Accounts Receivable

Accounting for Notes and Interest

Accounting for Long-Term Assets

Accounting for Partnerships

Corporations: Organization and Capital Stocks

Corporations: Earnings, Taxes, Distributions, and the Retained Earnings Statement

Corporations: Bonds

Statement of Cash Flows

Analysis of Financial Statements

Departmental Accounting

Manufacturing Accounting: The Job Order Cost System

Manufacturing Accounting: The Work Sheet and Financial Statements

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