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

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

Which of the following statements is correct?

If a payee indicates, as part of the endorsement, the name of the person, firm, or bank to whom the check is to be payable, the payee has made a(n) ____________________ endorsement.

The entry to record the issuance of a check in settlement of an interest-bearing promissory note includes a debit to Notes Payable, a debit to ____________________, and a credit to Cash.

Record the following transactions for the month of April 2013 on page 6 of a cash payments journal. Total, prove, and rule the cash payments journal as of April 30.

A canceled check for $147 erroneously listed on bank statement as $74.

The entry to replenish a petty cash fund includes

Record the following transactions for the month of November 2013 on page 18 of a cash payments journal. Total, prove, and rule the cash payments journal as of November 30.

To arrive at an accurate balance on a bank reconciliation statement, deposits in transit should be

A service charge charged by the bank.

Bank Reconciliations are not that important because banks never make errors.

Record the following transactions for the month of June 2013 on page 23 of a cash receipts journal. Total, prove, and rule the cash receipts journal as of June 30. June 4 $\quad$ Collected $\$ 700$ from Tom Whitney, a credit customer on account. 9 $\quad$$\quad$$\quad$ Laurie Bradley, the owner, invested an additional $\$ 10,000$ cash in the business. 10 $\quad$$\quad$$\quad$ Received a cash refund of $\$ 60$ for damaged supplies. 21 $\quad$$\quad$ Received a check from Scott White to pay his $\$ 1,400$ promissory note plus interest of $\$ 82$ . 26 $\quad$$\quad$ Had cash sales of $\$ 1,100$ plus sales tax of $\$ 77$ . There was a cash overage of $\$ 10$ .

Amounts that appear in the Other Accounts Credit section of the cash receipts journal require individual posting to the general ledger.

A check that has a full endorsement can be further endorsed by any bearer and therefore, is not as safe as a check with a blank endorsement.

After a bank reconciliation statement is completed, a firm may have to make an entry in its accounting records for

A(n) ____________________ check is a check dated some time in the future.

To arrive at the accurate balance on a bank reconciliation statement, it is necessary to deduct an NSF check from the bank statement balance.

Included with its bank statement a firm may receive a credit memorandum, which could indicate

The individual amounts in the Accounts Payable Debit column of the cash payments journal are posted to the accounts payable subsidiary ledger.

On December 31, 2013, Designer's Warehouse received a bank statement with an ending balance of $19,500. The balance in the firm's checkbook and Cash account on the same date was $20,580. The difference between the two balances is caused by the items listed below. Instructions: 1. Prepare a bank reconciliation statement for the firm as of December 31, 2013. 2. Record entries for any items on the bank reconciliation statement that must be journalized. Date the entries December 31, 2013. Use page 19 of a general journal.