Question 1

Prepare journal entries for the following petty cash fund transactions:
Nov. 1 Established a $50 petty cash fund.
15 Increased the petty cash fund to have a new balance of $100.
30 Replenished the petty cash fund. Currency and coins remaining were $20.
Approved paid vouchers were: $10 donation expense; $16 postage expense;
$30 office supplies expense; and $20 misc. expense.

Accepted Answer

The answer of Prepare journal entries for the following petty...

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

A company would use a change fund if

Accepted Answer

A)  there are cash transactions daily. 
B)  they want to pay the postage expense without writing a cheque. 
C)  the owner wants to make personal withdrawals easily. 
D)  None of these are correct.

Question 4

A signature card shows the signature of only the person who authorizes others in the company to sign cheques.

Accepted Answer

A) True 
 B)False

Question 5

Deposits in transit result because of a timing difference between the bank records and Ledger records.

Accepted Answer

A) True 
 B)False

Question 6

Why is the petty cash account not credited if you add up the vouchers in the petty cash box and they equal $72.00?

Accepted Answer

The answer of Why is the petty cash account not...

Question 7

Which of the following bank reconciliation items would NOT be reflected in a journal entry?

Accepted Answer

A)  Bank service charges 
B)  Collection of a note by the bank 
C)  Outstanding cheques 
D)  NSF customer cheque

Question 8

Phil's Training Service's $100 petty cash fund has a shortage of $4. The facts are: $80 in valid receipts for expenses; $16 in coins and currency. The journal entry to replenish the petty cash fund would include a

Accepted Answer

A)  credit to Cash for $80. 
B)  credit to Petty Cash for $84. 
C)  credit to Cash Short/Over for $4. 
D)  debit to Cash Short/Over for $4.

Question 9

Construct a bank reconciliation for Players Sporting Goods as of July 31, 2019, from the following information:
Ending general ledger balance    $420
Ending bank statement balance    320
Deposits in transit                         220
Outstanding cheques                   155
Bank service charge (debit memo) 35

Accepted Answer

The answer of Construct a bank reconciliation for Players Sporting...

Question 10

The use of physical cash in the business environment is increasing.

Accepted Answer

A) True 
 B)False

Question 11

On a bank reconciliation, deposits added to the bank statement side are called

Accepted Answer

A)  deposits in transit. 
B)  late deposits. 
C)  deposits on hold. 
D)  outstanding deposits.

Question 12

Bank service charges would be shown on a 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.

Question 13

The replenishment of the petty cash fund was recorded twice. This would cause

Accepted Answer

A)  expenses to be overstated. 
B)  expenses to be understated. 
C)  petty cash to be overstated. 
D)  petty cash to be understated.

Question 14

Determine the reconciled bank balance given the following:
The balance per bank statement is $108
The balance per general ledger is $105
There is a credit memo for a note collected, $408
There is a credit memo for interest earned, $25
There is a debit memo for a customer's NSF cheque $350
Deposits in transit, $850
Outstanding cheques amount to $845
This month's service charge amounts to $50
There is a debit memo for cheque printing fees, $25

Accepted Answer

The answer of Determine the reconciled bank balance given the...

Question 15

The entry to replenish the petty cash fund debited Insurance Expense for postage. This would cause

Accepted Answer

A)  Petty Cash to be overstated. 
B)  Petty Cash to be understated. 
C)  Postage Expense to be overstated. 
D)  Insurance Expense to be overstated.

Question 16

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

Accepted Answer

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

Question 17

When a bank debits your account, it is decreasing the balance.

Accepted Answer

A) True 
 B)False

Question 18

When a company sets up a change fund account it would be considered a(n)

Accepted Answer

A)  asset. 
B)  liability. 
C)  withdrawal. 
D)  expense.

Question 19

Prepare journal entries for the following petty cash fund transactions:
Jul. 1 Established a $75 petty cash fund.
9 Increased the petty cash fund to $100.
31 Replenished the petty cash fund. Currency and coins remaining were $20.
Approved paid vouchers were $12 donation expense, $21 postage expense, $30 office
supplies expense and $15 miscellaneous expense.

Accepted Answer

The answer of Prepare journal entries for the following petty...

Question 20

From the bank reconciliation no entry was recorded for a debit memo for a new cheque 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.

Exam 8: Banking Procedures and Control of Cash

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

A company would use a change fund if

A signature card shows the signature of only the person who authorizes others in the company to sign cheques.

Deposits in transit result because of a timing difference between the bank records and Ledger records.

Why is the petty cash account not credited if you add up the vouchers in the petty cash box and they equal $72.00?

Which of the following bank reconciliation items would NOT be reflected in a journal entry?

Phil's Training Service's $100 petty cash fund has a shortage of $4. The facts are: $80 in valid receipts for expenses; $16 in coins and currency. The journal entry to replenish the petty cash fund would include a

Construct a bank reconciliation for Players Sporting Goods as of July 31, 2019, from the following information: Ending general ledger balance $420 Ending bank statement balance 320 Deposits in transit 220 Outstanding cheques 155 Bank service charge (debit memo) 35

The use of physical cash in the business environment is increasing.

On a bank reconciliation, deposits added to the bank statement side are called

Bank service charges would be shown on a bank reconciliation as

The replenishment of the petty cash fund was recorded twice. This would cause

The entry to replenish the petty cash fund debited Insurance Expense for postage. This would cause

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

When a bank debits your account, it is decreasing the balance.

When a company sets up a change fund account it would be considered a(n)

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