Question 1

The journal entry to adjust the records from Nothin' But Organization bank reconciliation would include:

Accepted Answer

A) the total of outstanding checks. 
B) deposits in transit. 
C) notification from the bank of a customer's NSF check. 
D) correction of any errors or omissions on the bank statement. 
A) the total of outstanding checks. 
B) deposits in transit. 
C) notification from the bank of a customer's NSF check. 
D) correction of any errors or omissions on the bank statement.

Question 2

Checks that have been processed by the bank and are no longer negotiable are:

Accepted Answer

A) outstanding checks. 
B) canceled checks. 
C) checks in process. 
D) blank checks. 
A) outstanding checks. 
B) canceled checks. 
C) checks in process. 
D) blank checks.

Question 3

Endorsing a check:

Accepted Answer

A) guarantees payment. 
B) transfers the right to deposit or transfer cash. 
C) cancels the transaction. 
D) All of these answers are correct. 
A) guarantees payment. 
B) transfers the right to deposit or transfer cash. 
C) cancels the transaction. 
D) All of these answers are correct.

Question 4

If a check marked NSF is returned from the bank,an adjusting entry crediting cash is needed.

Accepted Answer

A) True 
 B)False

Question 5

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts.The facts are: total cash register tapes $400; total coins and currency $404.The summary journal entry to record the day's transactions would include a:

Accepted Answer

A) $400 debit to Cash; $4 debit to Cash Short/Over; and $404 credit to Sales. 
B) $404 debit to Cash; $4 credit to Cash Short/Over; and $400 credit to Sales. 
C) $404 debit to Cash and $404 credit to Sales. 
D) $400 debit to Cash and $400 credit to Sales. 
A) $400 debit to Cash; $4 debit to Cash Short/Over; and $404 credit to Sales. 
B) $404 debit to Cash; $4 credit to Cash Short/Over; and $400 credit to Sales. 
C) $404 debit to Cash and $404 credit to Sales. 
D) $400 debit to Cash and $400 credit to Sales.

Question 6

The drawee of the check is the person receiving the money.

Accepted Answer

A) True 
 B)False

Question 7

A petty cash fund is set up:

Accepted Answer

A) to pay for large expenses. 
B) to pay for small expenses. 
C) for the owner to withdraw money for personal use conveniently. 
D) None of these answers are correct. 
A) to pay for large expenses. 
B) to pay for small expenses. 
C) for the owner to withdraw money for personal use conveniently. 
D) None of these answers are correct.

Question 8

The Petty Cash account is debited when:

Accepted Answer

A) the account is being replenished. 
B) the account balance is being decreased. 
C) the account balance is being increased. 
D) when the custodian pays for postage from petty cash. 
A) the account is being replenished. 
B) the account balance is being decreased. 
C) the account balance is being increased. 
D) when the custodian pays for postage from petty cash.

Question 9

A signature card is kept in the bank files so that possible forgeries could be spotted.

Accepted Answer

A) True 
 B)False

Question 10

From the bank reconciliation no entry was recorded for a debit memo for a new check fee expense.This would cause:

Accepted Answer

A) liabilities to be understated. 
B) liabilities to be overstated. 
C) expenses to be understated. 
D) expenses to be overstated. 
A) liabilities to be understated. 
B) liabilities to be overstated. 
C) expenses to be understated. 
D) expenses to be overstated.

Question 11

Company policy for internal control should include all of the following except:

Accepted Answer

A) Employees will be rotated. 
B) Monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks. 
C) The owner (or responsible employee)signs all checks after receiving authorization to pay from the departments concerned. 
D) At time of payment,all supporting invoices or documents will be stamped "paid." 
A) Employees will be rotated. 
B) Monthly bank statements should be sent to and reconciled by the same employees who authorize payments and write checks. 
C) The owner (or responsible employee)signs all checks after receiving authorization to pay from the departments concerned. 
D) At time of payment,all supporting invoices or documents will be stamped "paid."

Question 12

A payment for $25 is incorrectly recorded on the checkbook stub as $52.The $27 error should be shown on the bank reconciliation as:

Accepted Answer

A) added to the balance per bank statement. 
B) deducted from the balance per bank statement. 
C) added to the balance per books. 
D) deducted from the balance per books. 
A) added to the balance per bank statement. 
B) deducted from the balance per bank statement. 
C) added to the balance per books. 
D) deducted from the balance per books.

Question 13

The normal balance of the Petty Cash account is a credit.

Accepted Answer

A) True 
 B)False

Question 14

For each of the following, identify in Column 1 the category to which the account belongs, in Column 2 the normal balance for the account, in Column 3 the financial statement on which the account balance is reported, and in Column 4 the nature of the account (permanent/temporary).
$$\begin{array}{l}
\text { Example: }\
\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column 1 } & \text { Column 2 } & \text { Column 3 } & \text { Column } 4 \
\hline \text { Cash } & \text { Asset } & \text { Debit } & \text { Balance Sheet } & \text { Permanent } \
\hline
\end{array}
\end{array}$$
-$$\begin{array} { | l | l | l | l | l | } 
\hline & \text { Column } 1 & \text { Column } 2 & \text { Column } 3 & \text { Column } 4 \
\hline \text { Petty Cash } & & & & \
\hline
\end{array}$$

Accepted Answer

\[\begin{array} { | l | l | l | l | l |

Question 15

Indicate which effect(s)each situation will have:
1.New check written
2.Recorded in the general journal
3.Recorded in auxiliary petty cash record
4.Petty cash voucher prepared
-________ Filled up the company's van with gas

Accepted Answer

The answer of Indicate which effect(s)each situation will have:
1.New check...

Question 16

If the ending balance in the Cash Short/Over account is a credit,it indicates that cash shortages have exceeded cash overages for the period.

Accepted Answer

A) True 
 B)False

Question 17

The Petty Cash account is used to pay for small items such as postage stamps and supplies.

Accepted Answer

A) True 
 B)False

Question 18

The bank charged another company's check against our account,this would be included on the bank reconciliation as a(n):

Accepted Answer

A) addition to the balance per books. 
B) subtraction from the balance per books. 
C) addition to the balance per bank. 
D) subtraction from the balance per bank. 
A) addition to the balance per books. 
B) subtraction from the balance per books. 
C) addition to the balance per bank. 
D) subtraction from the balance per bank.

Question 19

Calculate,from the following information accumulated by Sandra Johnson,the adjusted cash balance at the end of April. $$\begin{array} { | l | r | } 
\hline \text { Bank statement ending cash balance } & \$ 2,000 \
\hline \text { General ledger cash balance ending } & 3,250 \
\hline \text { Bank monthly service charge } & 45 \
\hline \text { Deposits in transit } & 2,500 \
\hline \text { Outstanding checks } & 1,500 \
\hline \text { NSF check returned with bank statement } & 205 \
\hline
\end{array}$$

Accepted Answer

A) $3,000 
B) $4,250 
C) $4,000 
D) $5,500 
A) $3,000 
B) $4,250 
C) $4,000 
D) $5,500

Question 20

The check is written and signed by the:

Accepted Answer

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

Exam 6: Banking Procedure and Control of Cash

The journal entry to adjust the records from Nothin' But Organization bank reconciliation would include:

Checks that have been processed by the bank and are no longer negotiable are:

Endorsing a check:

If a check marked NSF is returned from the bank,an adjusting entry crediting cash is needed.

Vanessa's Gymnastics' cash register tapes do not agree with cash receipts.The facts are: total cash register tapes $400; total coins and currency $404.The summary journal entry to record the day's transactions would include a:

The drawee of the check is the person receiving the money.

A petty cash fund is set up:

The Petty Cash account is debited when:

A signature card is kept in the bank files so that possible forgeries could be spotted.

From the bank reconciliation no entry was recorded for a debit memo for a new check fee expense.This would cause:

Company policy for internal control should include all of the following except:

A payment for $25 is incorrectly recorded on the checkbook stub as $52.The $27 error should be shown on the bank reconciliation as:

The normal balance of the Petty Cash account is a credit.

Indicate which effect(s)each situation will have: 1.New check written 2.Recorded in the general journal 3.Recorded in auxiliary petty cash record 4.Petty cash voucher prepared -________ Filled up the company's van with gas

If the ending balance in the Cash Short/Over account is a credit,it indicates that cash shortages have exceeded cash overages for the period.

The Petty Cash account is used to pay for small items such as postage stamps and supplies.

The bank charged another company's check against our account,this would be included on the bank reconciliation as a(n):

The check is written and signed by the:

Accounting Concepts and Procedures

Debits and Credits: Analyzing and Recording Business Transactions

Beginning the Accounting Cycle

The Accounting Cycle Continued

The Accounting Cycle Completed

Calculating Pay and Payroll Taxes: The Beginning of the Payroll Process

Paying,recording,and Reporting Payroll and Payroll Taxes: The Conclusion of the Payroll Process

Sales and Cash Receipts

Purchases and Cash Payments

Preparing a Worksheet for a Merchandise Company

Completion of the Accounting Cycle for a Merchandise Company

Accounting for Bad Debts

Notes Receivable and Notes Payable

Accounting for Merchandise Inventory

Accounting for Property, plant, equipment, and Intangible Assets

Partnership

Corporations: Organizations and Stock

Corporations: Stock Values, dividends, treasury Stocks, and Retained Earnings

Corporations and Bonds Payable

Statement of Cash Flows

Analyzing Financial Statements

The Voucher System

Departmental Accounting

Manufacturing Accounting

Filters