Exam 9: Cash Receipts, Cash Payments, and Banking Procedures

To arrive at an accurate balance on a bank reconciliation statement, a credit memorandum from the bank for the collection of a note and interest should be:

Checks written by a firm that were paid by the bank are called ________ checks.

A strong system of internal control requires that all payments be made by check except those made from a carefully controlled cash fund, such as a petty cash fund.

On a bank reconciliation statement, you would find all of the following except:

Read each of the following transactions. Determine the accounts to be debited and credited. The company uses the Periodic Inventory method A)Purchased merchandise for $950 in cash. B)Issued a check for $752 to remit sales tax to the state sales tax authority. C)Issued a check for $1,894 to purchase supplies.

Match the accounting terms with the description by entering the proper letter in the space provided. A. Bank reconciliation statement P. Drawee B. Blank endorsement Q. Drawer C. Bonding R. Endorsement D. Canceled check S. Full endorsement E. Cash T. Negotiable F. Cash payments journal U. Outstanding checks G. Cash receipts journal V. Payee H. Cash register proof W. Petty cash analysis sheet I. Cash Short or Over account X. Petty cash fund J. Check Y. Petty cash voucher K. Credit memorandum Z. Postdated check L. Debit memorandum AA. Promissory note M. Deposit in transit BB. Restrictive endorsement N. Deposit slip CC. Service charge O. Dishonored check DD. Statement of account ________ 1. A check paid by the bank on which it was drawn ________ 2. The process by which employees are investigated by an insurance company that will insure the business against losses through employee theft or mishandling of funds ________ 3. A special journal used to record and post transactions involving the receipt of cash ________ 4. A check dated sometime in the future ________ 5. A form sent to a firm's customers showing transactions during the month and the balance owed 6. A form used to record transactions involving petty cash ________ 7. A written authorization that transfers ownership of a check ________ 8. A special journal used to record transactions involving the payment of cash ________ 9. A written promise to pay a specified amount of money on a specific date ________ 10. A verification that the amount of currency and coins in a cash register agrees with the amount shown on the cash register audit tape ________ 11 The person or firm issuing a check ________ 12 A form used to record the payments made from a petty cash fund 13. An account used to record any discrepancies between the amount of currency and coins in the cash register and the amount shown on the audit tape ________ 14. The person or firm to whom a check is payable ________ 15. A written order signed by an authorized person instructing a bank to pay a specific sum of money to a designated person or business

Read each of the following transactions. Determine the accounts and amounts to be debited and credited. A)Issued a check for $2,500 to Jaime Gomez, the owner, as a cash withdrawal for personal use. B)Issued a check for $75 to establish a petty cash fund. C)Issued a check for $50 to replenish the petty cash fund. An analysis of the payments from the fund showed the following totals: Supplies, $25; Delivery Expense, $10; Miscellaneous Expense, $15)

Of the four categories shown in the form above, which category or categories require journal entries in the firm's records?

Checks issued by a firm and entered in its accounting records that have not been paid by the bank are called ________ checks.

The cash receipts journal for Able Company is shown below. Describe how the amounts would be posted to the general ledger accounts.

The Petty Cash Fund account has a(n)________ balance.

Which of the following statements is not correct?

In a firm that has a good system of internal control, cash receipts are deposited often.

A check issued for $1,980 to pay a vendor on account was recorded in the firm's records as $1,890; the canceled check was properly listed on the bank statement at $1,980. To arrive at an accurate balance on a bank reconciliation statement, the error should be:

To arrive at an accurate balance on a bank reconciliation statement, a debit memorandum for a customer check marked NSF should be:

Indicate in which section of the Bank Reconciliation Statement the following reconciling items would appear. - A deposit in transit.

Read each of the following transactions. Determine the accounts and amounts to be debited and credited. The company uses the Periodic Inventory method. A)Issued a check for $10,600 to pay a $10,000 note plus interest of $600. B)Issued a check for $1,500 to pay the monthly rent. C)Issued a check for $7,840 to a creditor on account for an invoice of $8,000 less a cash discount of $160.

After a multicolumn special journal such as a cash receipts journal is totaled, it should be proved to be sure that the debits and credits in the journal are equal.

The entry in a firm's accounting records for a credit customer's check that was returned by the bank marked "NSF" would include:

To arrive at an accurate balance on a bank reconciliation statement, outstanding checks should be: