Question 1

The petty cash fund should be replenished only at the end of each accounting period so that the accounts are brought up-to-date.

Accepted Answer

A) True 
 B)False

Question 2

The check written to establish the petty cash fund is recorded in the journal by crediting Cash and debiting Petty Cash.

Accepted Answer

A) True 
 B)False

Question 3

A special form of receipt showing the name of the payee, the purpose of the payment, and the account to be charged for each petty cash payment is known as a petty cash voucher.

Accepted Answer

A) True 
 B)False

Question 4

Match the terms with the definitions.
-Deposits that have not reached or been recorded by the bank before the bank statement is prepared.

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 5

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 $5; a deposit in transit totals $500; and outstanding checks total $300. The journal entry for a bank service charge would include

Accepted Answer

A)  debiting Cash and crediting Miscellaneous Expense. 
B)  debiting Cash and crediting Owner's Capital. 
C)  debiting Accounts Payable and crediting Cash. 
D)  debiting Miscellaneous Expense and crediting Cash. 
A)  debiting Cash and crediting Miscellaneous Expense. 
B)  debiting Cash and crediting Owner's Capital. 
C)  debiting Accounts Payable and crediting Cash. 
D)  debiting Miscellaneous Expense and crediting Cash.

Question 6

If the cash short and over account has a debit balance at the end of the fiscal year, the balance represents a revenue.

Accepted Answer

A) True 
 B)False

Question 7

On any given day, it is unlikely that the balance in the cash account on the depositor's general ledger (or books) will be the same as the bank balance.

Accepted Answer

A) True 
 B)False

Question 8

Match the terms with the definitions.
-A form showing a detailed listing of items being deposited.

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 9

It is good business policy that all cash and cash items received be deposited daily in a bank.

Accepted Answer

A) True 
 B)False

Question 10

The difference between the balance in the cash account on the depositor's books and the bank's books is usually due to errors.

Accepted Answer

A) True 
 B)False

Question 11

The petty cash payments record indicates classified expenditures as follows: Automobile Expense, $20; Supplies Expense, $12; Postage Expense, $6; and Miscellaneous Expense, $5. The journal entry to replenish the petty cash fund would include a credit to Cash for

Accepted Answer

A)  $38. 
B)  $5. 
C)  $11. 
D)  $43. 
A)  $38. 
B)  $5. 
C)  $11. 
D)  $43.

Question 12

Whenever the bank mails a credit memo to the depositor indicating the amount of interest credited to the account, the transaction that would be entered in the accounting records of the depositor would include

Accepted Answer

A)  debiting Interest Earned and crediting Cash. 
B)  debiting Interest Expense and crediting Cash. 
C)  debiting Cash and crediting Interest Earned. 
D)  debiting Cash and crediting Interest Expense. 
A)  debiting Interest Earned and crediting Cash. 
B)  debiting Interest Expense and crediting Cash. 
C)  debiting Cash and crediting Interest Earned. 
D)  debiting Cash and crediting Interest Expense.

Question 13

Payments from the petty cash fund should not be made without obtaining some sort of receipt in return.

Accepted Answer

A) True 
 B)False

Question 14

A petty cash fund of $200 has $27 in cash, $170 in petty cash vouchers, and $3 in miscellaneous receipts not included with the petty cash vouchers. The debit to the Cash Short and Over would be

Accepted Answer

A)  $173. 
B)  $170. 
C)  $27. 
D)  $0. 
A)  $173. 
B)  $170. 
C)  $27. 
D)  $0.

Question 15

Each check should be identified by its

Accepted Answer

A)  AAB number. 
B)  MBA number. 
C)  CPA number. 
D)  ABA number. 
A)  AAB number. 
B)  MBA number. 
C)  CPA number. 
D)  ABA number.

Question 16

A debit journal entry to the cash short and over account is used to record a cash shortage.

Accepted Answer

A) True 
 B)False

Question 17

A depositor is not responsible or liable to the bank for items deposited that are not honored when presented for payment.

Accepted Answer

A) True 
 B)False

Question 18

A special multi-column record that supplements the regular accounting records and from which no posting is done is called a

Accepted Answer

A)  bank reconciliation form. 
B)  petty cash payment record. 
C)  journal. 
D)  ledger. 
A)  bank reconciliation form. 
B)  petty cash payment record. 
C)  journal. 
D)  ledger.

Question 19

Match the terms with the definitions.
-The depositor's checks paid by the bank during the bank statement period.

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 20

The key documents and forms required in opening and using a checking account are the signature card, deposit tickets, checks, and bank statements.

Accepted Answer

A) True 
 B)False

Exam 7: Accounting for Cash

The petty cash fund should be replenished only at the end of each accounting period so that the accounts are brought up-to-date.

The check written to establish the petty cash fund is recorded in the journal by crediting Cash and debiting Petty Cash.

A special form of receipt showing the name of the payee, the purpose of the payment, and the account to be charged for each petty cash payment is known as a petty cash voucher.

Match the terms with the definitions. -Deposits that have not reached or been recorded by the bank before the bank statement is prepared.

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 $5; a deposit in transit totals $500; and outstanding checks total $300. The journal entry for a bank service charge would include

If the cash short and over account has a debit balance at the end of the fiscal year, the balance represents a revenue.

On any given day, it is unlikely that the balance in the cash account on the depositor's general ledger (or books) will be the same as the bank balance.

Match the terms with the definitions. -A form showing a detailed listing of items being deposited.

It is good business policy that all cash and cash items received be deposited daily in a bank.

The difference between the balance in the cash account on the depositor's books and the bank's books is usually due to errors.

The petty cash payments record indicates classified expenditures as follows: Automobile Expense, $20; Supplies Expense, $12; Postage Expense, $6; and Miscellaneous Expense, $5. The journal entry to replenish the petty cash fund would include a credit to Cash for

Whenever the bank mails a credit memo to the depositor indicating the amount of interest credited to the account, the transaction that would be entered in the accounting records of the depositor would include

Payments from the petty cash fund should not be made without obtaining some sort of receipt in return.

A petty cash fund of $200 has $27 in cash, $170 in petty cash vouchers, and $3 in miscellaneous receipts not included with the petty cash vouchers. The debit to the Cash Short and Over would be

Each check should be identified by its

A debit journal entry to the cash short and over account is used to record a cash shortage.

A depositor is not responsible or liable to the bank for items deposited that are not honored when presented for payment.

A special multi-column record that supplements the regular accounting records and from which no posting is done is called a

Match the terms with the definitions. -The depositor's checks paid by the bank during the bank statement period.

The key documents and forms required in opening and using a checking account are the signature card, deposit tickets, checks, and bank statements.

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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